The board of director of Sung Hung Kai Properties (SHKP) yesterday decided to remove company chairman Walter Kwok.

Walter Kowk

Kwok's work will be handed over to her 79-year-old mother Kwong Siu-hing.

Kwok's two younger brothers - Thomas Kwok and Raymond Kwok - will succeed him as the company's chief executives and Walter Kwok will be the company's non-executive director.

SHKP yesterday held a board meeting to vote out Walter Kwok. The board members reached the consensus for the impeachment.

The company released an announcement after the meeting, saying the decision was taken in the best interests of the company and its shareholders.

It stressed that the company business remains unchanged and it will strive for the best return for the shareholders.

Source said the board members were determined to sack Walter Kwok because he made some commercial judgment in the past which damaged the company's reputation.

After Walter Kwok's re-designation, the director's payment will sharply shrink from over HK$2 million to HK$100,000 per annum.

Kwok did not show up at the board meeting yesterday. But he issued a statement regreting the outcome, and noting that the board of director hadn't considered his 18-year contribution to the company when he was at the company's helm.

Sun Hung Kai Properties' family feud reveals the corporate management problem commonly existing in family-controlled companies. Bloomberg

Denying the accusations, he said the board had violated conflict of interest to allow non-executive directors, who have business relationship with SHKP, to participate in the voting.

He said he would continue to monitor the company's operation to safeguard the interests of its shareholders.

Kwong Siu-hing's tenure has taken effect until the next annual general meeting in December. But source said the arrangement is just temporary.

"I hope the Kwok's family can reconcile as Sun Hung Kai is such a successful company," said Lui Che-woo, chairman of K. Wah Group and a good friend of Kwok Tak-shing, the father of the Kwok's brothers.

"The family conflict has already negatively affected SHKP's share price."

Despite the management reshuffle, shares of SHKP yesterday bounced back HK$1.10 or 0.87 percent to close at HK$126.80.

Raymond So, an associate professor of the Chinese University of Hong Kong, said that the Kwok brothers' dispute is tentatively settled, but the incident raises public concerns about the corporate governance of family-controlled companies.

Walter Kwok petitioned the High Court on May 15 to stop the board from forcibly removing him, but the court dismissed his filing in May 26.

(HK Edition 05/28/2008 page2)