Three arrested in HK's biggest ever corruption probe An illuminated logo of Sun Hung Kai Properties (R) adorns the company's headq...

Three arrested in HK's biggest ever corruption probe

An illuminated logo of Sun Hung Kai Properties (R) adorns the company's headquarters in Hong Kong on Thursday. ICAC arrested property tycoons Thomas and Raymond Kwok and former official Rafael Hui in connection with alleged bribery offences. Photo: AFP

Hong Kong's Sun Hung Kai Properties lost nearly $5 billion of market value on Friday, a day after the arrests of co-chairmen Raymond and Thomas Kwok in a major corruption probe that involves a former senior official of the Special Administrative Region's government.

Hong Kong's Independent Commission Against Corruption (ICAC) said in a statement on Thursday night that two senior executives and a former senior official of the government had been detained for investigation into alleged bribery.

ICAC didn't name the three people, but Sun Hung Kai announced in a statement late on Thursday that the billionaire Kwok brothers had been arrested by ICAC.

The Kwok brothers' fortune is $18.3 billion according to Forbes Magazine, which ranks the brothers and their family as the 27th richest in the world.

Local media reported that Rafael Hui, who served as the local government's chief secretary between 2005 and 2007, had also been arrested.

The trio was released on bail late on Thursday night but is expected to return for more questioning, according to Reuters.

ICAC declined to comment on details of the commission's biggest probe in its 38-year history when contacted by the Global Times on Friday, saying the matter is still under investigation.

According to Sun Hung Kai's statement, the company has been required to provide certain information to ICAC to assist its investigation.

It also said the case wouldn't affect the company's normal business operation, and that the Kwok brothers have the board's full backing.

Affected by the news, shares of the leading real estate developer in Asia dropped over 13 percent on the Hang Seng Index on Friday, its biggest drop since 1998.

The South China Morning Post quoted unnamed sources saying allegations include millions of dollars in debts linked to Hui, a luxury apartment and irregularities over land deals.

Hui used to be the business advisor of Sun Hung Kai between 2003 and 2005.

The Department of Justice in Hong Kong said on Thursday that it had authorized Director of Public Prosecution, Kevin Zervos, to handle the case after ascertaining he has no connection with anybody involved, Radio Television Hong Kong reported.

The department said if and when required, Zervos will consider whether any prosecutions are warranted.

Zhang Jian, a researcher from the Hong Kong Study Department at Shanghai Institutes for International Studies, told the Global Times the case could have a huge impact on Hong Kong society in terms of shattering public confidence in the SAR government.

"If corruption charges are proven to be true, Hong Kong's reputation for having a clean government will be largely tarnished," Zhang said.

Zhang added that the influx of scandals in Hong Kong over recent years involving officials colluding with real estate developers reflected the SAR government's failure at curbing corruption.

Agencies contributed to this story