Sun Hung Kai Properties Chairman Walter Kwok sued his two brothers for libel, alleging that his brothers had accused him of being a liar and making "undesirable" investment decisions.

He also added that their words had seriously damaged his reputation.

Kwok, who has been on leave since February, applied to the Court of First Instance on Wednesday to seek damages and restrain the brothers, Thomas and Raymond, from publishing or causing the publication of three letters that contain "defamatory statements".

However, Thomas and Raymond's office issued a statement, which strongly denied Walter's accusation and said they have not received the litigation document.

The court document stated that the defendants had issued a letter to all directors of the company and their mother Kwong Siu-hing, saying Walter's conduct has been most inconsistent with his claim that he has never lied.

The letter also said Walter did not keep his promise and accused him of being a liar.

In the second letter issued on May 5, Thomas and Raymond said Walter has been suffering from mental disorder and has adversely affected company's business.

The application quoted the letter that says: "You (Walter) say that you are fit and well. We are afraid that this is not how mother and the two of us (Thomas and Raymond) see it."

In the third letter issued on the same date, Thomas and Raymond said Walter was seriously undermining the morale of the company's senior executives, upsetting the company's operations and organization structure, and making "undesirable" investment.

"Unfortunately, since the board meeting on Feb 18, Walter did none of the things he promised to do...He interfered with meetings of executive directors and management of the business of the group," the application quoted the letter.

Walter's "reputation has been seriously damaged and he has been shunned and avoided and/or subject to public odium scandal and ridicule. The plaintiff has also suffered grave distress, anguish and embarrassment," the application said.

Walter last week won a temporary injunction to block the company from removing him as the company's chairman and chief executive officer in the board meeting.

In the application for the injunction order, he disclosed that the three brothers had disagreements over the company business decision, and whether Walter is suffering from mental disorder.

Raymond informed Walter in January that a doctor at Stanford University surnamed Maldonado had diagnosed Walter as suffering from bipolar affective disorder, which Walter did not agree.

The Court of First Instance will hear the application for the injunction today.

(HK Edition 05/23/2008 page2)