Sun Hung Kai
Encyclopedia
Sun Hung Kai Properties Ltd. (SHKP; ) is a listed corporation based in Hong Kong. The company is controlled by the family trust set up by Kwok Tak Seng
, who founded the company.
in 1972.
It was once reported in a local newspaper that the company and Cheung Kong (Holdings) are together increasingly dominant in the development of new private homes, accounting for 70% of the market in 2010, up from around half of that in 2003. This concentration, with much of the rest of the market occupied by other very large firms, is attributed to the government's policy of auctioning land in expensively large blocks, squeezing out small and mid-sized firms, according to the Consumer Council.
Nevertheless, clarification was later made in the column of “letters to editors” in the same newspaper that Sun Hung Kai Properties’ overall share of primary residential sales in terms of attributable value from January to July 2010 has been approximately 20% – a figure that has been largely stable over the last few years.
. The MTR Corporation
was a partner in the venture. Sun Hung Kai Properties, owns 47.5 per cent of the development, Henderson Land Development
, whose chairman Lee Shau Kee
sits on the SHKP board, took a 32.5 per cent stake in the project. SHKP is also building the International Commerce Centre
, the tallest building in Hong Kong upon its completion.
by announcing inflated prices (per square metre) achieved. A buyer apparently paid HK$168 million, or HK$31,300 per square foot, for a 5360 square feet (498 m²) penthouse. Sweeteners were allegedly given (discounts given to the same purchaser on other units bought), but were excluded from the calculation. This allowed SHK to raise prices of the next batch of 500 units by 5–10 percent. But SHKP has denied the allegations.
, Chairman and Chief Executive, would take a "temporary leave of absence for personal reasons with immediate effect". Walter Kwok announced that he would take a "personal holiday", handing over his duties to his two younger brothers.
The suddenness of his departure caused a huge stir in Hong Kong. The Standard
reported that the elder Kwok was removed from his position by his mother, who is the controlling shareholder of the company, to protect the family interests. The journal revealed that Walter's mistress of 4 years has been wielding increasing power in the business, and causing friction with his brothers.
SHKP's announcement left the financial markets hungry for more disclosure, causing its stock price to decline against the general market the following day. Corporate communications issued a second statement insisting that the business would not be affected, and that Walter would resume his functions after his leave of 2 to 3 months. Walter's mistress, named by the press as Ida Tong Kam-hing (唐錦馨), had apparently introduced property transactions valued at HK$
4 billion to the Group or to the Kwoks' private investment vehicles. Company spokesmen stated that no person named Ida Tong was employed by the Group.
On 29 February, tycoon and fellow board member Lee Shau Kee
confirmed that Mrs. Kwok forced the leave of absence upon Walter over Ida Tong during the last board meeting.
which claimed that Walter reached an agreement with his mother and two brothers in February that he would return to his duties if certain conditions were met. Walter alleged that his two brothers violated the agreement by attempting to remove him despite having fulfilled the pre-defined criteria, including procuring at least two medical opinions showing he is fit to return. Walter secured a last-minute injunction to delay the vote, to allow more time for discussions. On the sidelines of the dispute to remove Walter as Chairman and CEO, Walter and his brothers claim the other(s) made major management decisions unwisely and without consultation.
Kwok Tak Seng
Kwok Tak-Seng was a Chinese entrepreneur and the founder of Sun Hung Kai Properties, the largest property developer in Hong Kong.-Life:...
, who founded the company.
History
The company was one of many non-British owned companies that overtook the British trading companies or 'hongs' that dominated the financial order in Hong Kong prior to 1997. The company was founded in 1963 by the elder Kwok, together with Fung King-hei and Lee Shau Kee, and was listed on the Hong Kong Stock ExchangeHong Kong Stock Exchange
The Hong Kong Stock Exchange is a stock exchange located in Hong Kong. It is Asia's third largest stock exchange in terms of market capitalization behind the Tokyo Stock Exchange and the Shanghai Stock Exchange and fifth largest in the world...
in 1972.
Introduction
SHKP was publicly listed in 1972 and is one of the largest property companies in Hong Kong. It specializes in premium-quality residential and commercial projects for sale and investment. It employs more than 35,000 people and has in-house expertise in land acquisition, architecture, construction, engineering and property management.Main Business
SHKP’s core business is the development of property for sale and investment. It achieved a revenue of HK$62,553 million in financial year 2010/11, with profit attributable to shareholders of HK$48,097 million. The majority of its revenues and operating profit was derived from property sales and rental.Land Bank
As at June 2011, the company owned a land bank in Hong Kong of 44.2 million in terms of attributable gross floor area, consisting of 27.7 million of completed investment properties and 16.5 million of properties under development. Of the properties under development, 12.9 million are for sale, while the other 3.6 million will be kept as long-term investments and added to the Group's investment properties portfolio upon completion. In addition, the company owns over 26 million of agricultural land (site area) in the New Territories, primarily along rail lines, the majority of which is in the process of land use conversion.Credit Ratings
The Group has always attained the highest credit ratings amongst Hong Kong developers. Moody’s gives the Group an A1 rating with a ‘stable’ outlook and Standard & Poor’s raised the Group’s rating from A to A+ with a ‘stable’ outlook in December 2010.Other Businesses
The company also has complementary operations in the following property related fields:- Hotels
- Property management
- Telecommunications
- Information technology
- Transportation, infrastructure and logistics
It was once reported in a local newspaper that the company and Cheung Kong (Holdings) are together increasingly dominant in the development of new private homes, accounting for 70% of the market in 2010, up from around half of that in 2003. This concentration, with much of the rest of the market occupied by other very large firms, is attributed to the government's policy of auctioning land in expensively large blocks, squeezing out small and mid-sized firms, according to the Consumer Council.
Nevertheless, clarification was later made in the column of “letters to editors” in the same newspaper that Sun Hung Kai Properties’ overall share of primary residential sales in terms of attributable value from January to July 2010 has been approximately 20% – a figure that has been largely stable over the last few years.
Projects
It has been, and continues to be involved in a number of high-profile projects in Hong Kong. In 1996, SHKP was the lead developer which had bid the sum of HK$5.5 billion to acquire the rights to develop Hong Kong's tallest building, the International Finance CentreInternational Finance Centre
The International Finance Centre is an integrated commercial development on the waterfront of Hong Kong's Central District....
. The MTR Corporation
MTR Corporation
MTR Corporation Limited is a company listed on the Hong Kong Exchange and included in the Hang Seng Index. MTR owns and runs the Hong Kong MTR metro system, and is also a major property developer and landlord in Hong Kong...
was a partner in the venture. Sun Hung Kai Properties, owns 47.5 per cent of the development, Henderson Land Development
Henderson Land Development
Henderson Land Development Co. Ltd. is a listed property company and a constituent of the Hang Seng Index. The company's principal activities are property development and investment, project management, construction, hotel operation, department store operation, finance, investment holding and...
, whose chairman Lee Shau Kee
Lee Shau Kee
Lee Shau-kee GBM is a property developer and majority owner of Henderson Land Development , a property conglomerate with interests in properties, hotels, restaurants and internet services...
sits on the SHKP board, took a 32.5 per cent stake in the project. SHKP is also building the International Commerce Centre
International Commerce Centre
The International Commerce Centre is a 108 floor, skyscraper completed in 2010 in West Kowloon, Hong Kong. It is a part of the Union Square project built on top of Kowloon Station. The development is owned and jointly developed by MTR Corporation Limited and Sun Hung Kai Properties, Hong...
, the tallest building in Hong Kong upon its completion.
Lack of transparency of internal sales
In 2005, the developer was criticised for the lack of transparency in its public sale of residential properties to speculators and end-users. The company was accused of the practice of "internal sales" of uncompleted units, the absence of sale price-lists, and also for hyping sales for flats in its The Arch development in West KowloonWest Kowloon
West Kowloon is a part of Kowloon, Hong Kong situated within the Yau Tsim Mong District. It is bounded by Canton Road to the east, Victoria Harbour to the west and the south, and Jordan Road to the north. Further to the north, the area extends to Tai Kok Tsui to the west of the West Kowloon...
by announcing inflated prices (per square metre) achieved. A buyer apparently paid HK$168 million, or HK$31,300 per square foot, for a 5360 square feet (498 m²) penthouse. Sweeteners were allegedly given (discounts given to the same purchaser on other units bought), but were excluded from the calculation. This allowed SHK to raise prices of the next batch of 500 units by 5–10 percent. But SHKP has denied the allegations.
"Temporary" leave of Walter Kwok
On 18 February 2008, SHK announced that Walter KwokWalter Kwok
Kwok Ping-sheung, Walter JP is the eldest son of Kwok Tak Seng and Kwong Siu-hing...
, Chairman and Chief Executive, would take a "temporary leave of absence for personal reasons with immediate effect". Walter Kwok announced that he would take a "personal holiday", handing over his duties to his two younger brothers.
The suddenness of his departure caused a huge stir in Hong Kong. The Standard
The Standard
The Standard is an English free newspaper of Hong Kong with a daily circulation of 231,018. It was called the Hong Kong Standard and changed to HKiMail during the Internet boom, but it changed back to The Standard in 2001....
reported that the elder Kwok was removed from his position by his mother, who is the controlling shareholder of the company, to protect the family interests. The journal revealed that Walter's mistress of 4 years has been wielding increasing power in the business, and causing friction with his brothers.
SHKP's announcement left the financial markets hungry for more disclosure, causing its stock price to decline against the general market the following day. Corporate communications issued a second statement insisting that the business would not be affected, and that Walter would resume his functions after his leave of 2 to 3 months. Walter's mistress, named by the press as Ida Tong Kam-hing (唐錦馨), had apparently introduced property transactions valued at HK$
Hong Kong dollar
The Hong Kong dollar is the currency of the jurisdiction. It is the eighth most traded currency in the world. In English, it is normally abbreviated with the dollar sign $, or alternatively HK$ to distinguish it from other dollar-denominated currencies...
4 billion to the Group or to the Kwoks' private investment vehicles. Company spokesmen stated that no person named Ida Tong was employed by the Group.
On 29 February, tycoon and fellow board member Lee Shau Kee
Lee Shau Kee
Lee Shau-kee GBM is a property developer and majority owner of Henderson Land Development , a property conglomerate with interests in properties, hotels, restaurants and internet services...
confirmed that Mrs. Kwok forced the leave of absence upon Walter over Ida Tong during the last board meeting.
Escalation
On 16 May 2008, Walter filed a writ with the High CourtHigh Court (Hong Kong)
The High Court in Hong Kong consists of the Court of Appeal and the Court of First Instance. It deals with criminal and civil cases which have risen beyond the lower courts. It was named the Supreme Court before 1997.- High Court Building :...
which claimed that Walter reached an agreement with his mother and two brothers in February that he would return to his duties if certain conditions were met. Walter alleged that his two brothers violated the agreement by attempting to remove him despite having fulfilled the pre-defined criteria, including procuring at least two medical opinions showing he is fit to return. Walter secured a last-minute injunction to delay the vote, to allow more time for discussions. On the sidelines of the dispute to remove Walter as Chairman and CEO, Walter and his brothers claim the other(s) made major management decisions unwisely and without consultation.