Shares in Chinese Estates Holdings fell nearly 9 per cent as they resumed trading on Friday after the company’s chairman Joseph Lau was charged with bribery and money laundering in Macau.
The Hong Kong property group said in a statement that Mr Lau denied the allegations and that he would remain chairman, chief executive officer and executive director of the company.
“The company’s current assessment is that the accusation and any subsequent criminal proceedings [if any] against Mr Lau will not have any material adverse effect on the operations or financial conditions of the company,” it said.
Mr Lau is one of Hong Kong’s wealthiest billionaires and a fixture in the tight-knit business community already shaken up by the arrests of the Kwok brothers of Sun Hung Kai Properties.
“Big Lau”, as the 61-year-old is called to differentiate him from his younger brother, controls about 75 per cent of shares in Chinese Estates, which has a market capitalisation of HK$17.3bn (US$2.2bn).
The shares were suspended on Thursday after the news that Mr Lau had been charged on Wednesday night. They resumed trading at HK$8.97, which was 8.7 per cent lower than Wednesday’s close, but had recovered to HK$9.18 by late morning.
Including Friday’s losses, Chinese Estates was worth nearly a third less than in February, with investors in subsequent months having turned bearish on Hong Kong’s property shares because the incoming government is expected to increase land supply and adopt a policy of making housing more affordable.
The allegations against Mr Lau are the latest twist in a case brought by the commission Against Corruption of Macau, the anti-graft watchdog, against Ao Man-long, Macau’s former secretary of transport and public works, who was jailed for 28 years in 2009 on separate corruption charges.
During Mr Ao’s latest trial last month, Macau prosecutors accused the former official of accepting $2.6m in return for helping Mr Lau and a business partner obtain land near Macau’s airport to build a large luxury residential development called La Scala. The court has yet to announce its ruling on Mr Ao’s case. Mr Ao denies the allegations.