UPDATE 1-Graft trial adjourned for Hong Kong's billionaire Kwok brothers


(Recasts) By Alex Frew McMillan

HONG KONG, Oct 12 (Reuters) - The billionaire Kwok brothers'corruption trial was adjourned on Friday until January to allowthe prosecution more time to gather evidence in Hong Kong'shighest-profile graft case in decades.

The Independent Commission Against Corruption (ICAC)arrested the tycoons in March in one of the agency's biggestinvestigations since it was set up in 1974 to root outwidespread corruption in the then British colonial governmentand police.

Thomas and Raymond Kwok run Sun Hung Kai Properties, the world's second-largest property developer bystock-market value. The Kwok family is Hong Kong's secondwealthiest after that of Li Ka-shing.

Rafael Hui, the No.2 official in government from 2005 to2007, was also arrested in connection with the case, as wereThomas Chan, an executive in charge of land acquisition at SunHung Kai, and Francis Kwan, a former banker.

They are charged with a total of eight offences includingconspiracy to offer advantages to a public servant between June2000 and January 2009. The ICAC said the offences involvedpayments and unsecured loans totalling over HK$35 million ($4.9million).

The five spoke briefly in court on Friday to say theyunderstood that the case was being adjourned until January 25,to be heard at the Court of First Instance.

No pleas were taken and bail was extended.

The stakes are high for the Kwoks and the government, withSun Hung Kai's share price having fallen sharply since thescandal broke, while Hong Kong's reputation for integrity hasbeen hit by charges also brought against its former chiefsecretary.

Prosecutors will likely seek swift progress to bolster thegovernment's anti-graft credentials amid creeping publicconcerns of overly cozy ties and accommodative policies towardsproperty tycoons.

A long-running saga within the dynastic Kwok family boiledover in 2008 when elder brother Walter was ousted as chairman ofSun Hung Kai Properties by his brothers amid claims he hadbipolar affective disorder and was not fit to lead the company.

The firm, previously regarded as one of Hong Kong's best-runcompanies and known for its quality apartments, responded to thearrests by promoting two executives and two of the Kwoks' sonsas alternate directors.

Shares of Sun Hung Kai were down 0.6 percent on Friday,lagging a 0.5 percent gain in the benchmark index .

Hong Kong returned to Chinese rule in 1997.(Editing by Nick Macfie)


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