Arrested Hong Kong billionaires say did 'nothing wrong'

Hong Kong's billionaire Kwok brothers, whose arrest last week on suspicion of corruption has gripped the financial hub, said on Tuesday they had done nothing wrong and insisted it was business as usual at the family conglomerate they jointly run.

The investigation into Raymond and Thomas Kwok, co-chairmen of Sun Hung Kai Properties Ltd, is the biggest case launched by Hong Kong's Independent Commission Against Corruption (ICAC) since it was set up in 1974 to root out graft.

"I can tell you definitely that I personally did not do anything wrong and I believe that Thomas Kwok has done nothing wrong," Raymond Kwok told reporters as the pair faced the media at the company's headquarters in Hong Kong's busy Wan Chai district, in their first public appearance since their arrests.

The brothers, worth $18.3 billion according to Forbes magazine, said the investigation would not affect business decisions at Asia's largest developer, and that sales and development plans would go ahead as scheduled.

"There is one thing I must say to you: 'Don't worry, here at SHKP it is business as usual'," said Thomas Kwok, reading in Chinese from a prepared statement as the company's executive directors stood behind the brothers in a show of solidarity.

The company owns some of the former British colony's largest properties, including its tallest building, the International Commerce Centre that houses Morgan Stanley and the Ritz Carlton. The arrests last Thursday of the two brothers, along with Rafael Hui, a former No 2 official in the Hong Kong government, came days after the election of Beijing-loyalist Leung Chun-ying as the city's next leader.

He has pledged to address soaring property prices. The Hong Kong public has been increasingly aggrieved at the perceived cosy ties between government and big business, and some observers have interpreted the arrests as a first move in an attempt to rein in the power of the monied elite.

The brothers and Hui were released on bail and have not been charged with any offence. But last week's event dented investor confidence and nearly $5 billion in Sun Hung Kai's market value was wiped out when trading in the company's shares resumed on Friday. On Tuesday the stock rose about 2 percent to around HK$96.25, still well below HK$111.10 when the company halted trading in its shares last Thursday. The benchmark Hong Kong share index <.HSI> closed up 1.3%.

"I feel that a lot of long funds are still hanging on to the stock as it is such a quality stock and you can't just panic and sell," said Sylvia Wong, an analyst at UOB Kay Hian.

Sun Hung Kai is a family-run conglomerate, founded by the Kwok's father, and owns phone, trash and bus businesses in Hong Kong. Details about the focus of the investigation into the Kwoks and Hui remain unclear.

Hui has been a long-time adviser to Sun Hung Kai and has known the Kwoks since childhood.

He was Chief Secretary under Hong Kong's leader Donald Tsang in 2005-07, a post that would entitle him to government housing.

But he chose to stay in his 4,000 square foot Leighton Hill apartment - a pink and tan marble residential tower that overlooks the Happy Valley racecourse and was developed by Sun Hung Kai. The Kwoks and Hui are part of a tiny elite who dominate business and politics of the city of 7 million, which returned to Chinese rule in 1997.

In the past few weeks, Sun Hung Kai has also disclosed that Thomas Chan Kui-yuen, in charge of project planning and land acquisitions, had been arrested for suspected bribery. The Kwok family had a public feud in 2008 that ended with elder brother Walter being ousted as chairman.

Thomas and Raymond, backed by their mother, claimed Walter was mentally unfit to run the business, claims Walter has denied.

Walter Kwok alleged in a 2008 writ trying to prevent his ouster that he had concerns about the way the company was being run, including doubts about a land acquisition in Hong Kong's rural New Territories, the way the firm granted construction contracts and questions about a lease at the International Commerce Centre on the Kowloon peninsula.

The eldest brother remains a non-executive director of the company, but according to its website did not attend any of the four board meetings held during the last financial year.

Over the past four decades, Sun Hung Kai, listed in 1972, has built some of Hong Kong's most expensive property, from luxury hilltop apartment blocks and harbour-front skyscrapers to landmark office buildings.

The company's net profit has soared along with surging property prices, to HK$48 billion in the year to last June from $10.4 billion two years earlier.