FB News

Family Business Roundup: Thomas Kwok bribery, Korean Air, and News Corp UK

By Michael Finnigan

Thomas Kwok found guilty on bribery charges

Hong Kong billionaire Thomas Kwok, co-chairman of one of the district's largest property developers, has been convicted of conspiring to bribe one of the city's former top officials. His brother, Raymond, was found not guilty on all charges.

Third generation Thomas Kwok was found guilty of conspiring to pay HK$8.5 million (€0.89 million) to former chief secretary Rafael Hui in exchange for favourable treatment for his family's business Sun Hung Kai Properties, the second-most valuable real estate company in the world.

Thomas Kwok, 63, and his brother Raymond, 61, jointly chair development giant Sun Hung Kai Properties.

The three month trial has drawn attention to the close ties between Hong Kong's most powerful businessmen and government officials.

Sun Hung Kai Properties had its shares suspended from trade following news of the verdict. The company posted revenues of HK$75.1 billion in the year to June 2014.

Korean Air faces penalties following macadamia nut case

Korean Air will face penalties after pressuring employees to lie during a government investigation into a December incident that saw the chairman's daughter delay a flight over incorrectly served macadamia nuts.

South Korea's transport minister said he will deliver up to 21 days of flight suspensions, or a $1.3 million (€1.06 million) fine, stemming from the incident in which Heather Cho, 40, delayed one of Korean Air's flights because an air steward served her macadamia nuts in a bag, rather than on a plate.

Cho, the eldest daughter of Cho Yang Ho, who is chairman of the airline, and its parent company Hanjin Group, also breached aviation safety laws by ordering the pilot to return the plane to the gate in order for the flight attendant to be removed.

The 40-year-old denied reports that she made the flight attendant kneel and beg her forgiveness. She has since publicly apologised for the incident and resigned from her post as senior vice president.

"I feel so sorry for our customers and South Koreans for causing such trouble... and seek forgiveness from the people who might have been hurt by me,” Cho said in a televised statement.

Korean Air was founded by the government in 1962 and privatised seven years later by Cho Yang Ho's father, the late Cho Choong Hoon. Korean Air posted revenues of $10.8 billion in the year ending December 2013.

News Corp UK suffers £3.5 million loss

Rupert Murdoch's News Corp UK has suffered an operating loss of £3.5 million (€4.46 million) in the year to June compared to a £51 million profit the year before, according to results filed with Companies House.

The results suggest that News Corp, which owns The Times and The Sun, is struggling to produce positive financial results as it transitions towards digital publishing, including a move to position its titles behind a paywall.

Murdoch split his media empire into two distinct companies last summer – News Corp and 21st Century Fox – to protect the profitable entertainment businesses from News Corp's struggling publishing companies.

Operating profits at The Sun also took a nosedive, the report showed, falling to £35.6 million from £62.1 million in 2013. Revenues at The Sun fell 5.5% to £489 million.

The British newspaper and publishing division lost £75.3 million before tax in the year ending June 2014.