Sun Hung Kai plan B keeps it all in the family at world's No.2 developer - Reuters UK
* Appointment of younger Kwoks won't change much-activist
* New deputy MDs could act as mentors to Kwok sons
* Corporate governance response inadequate-association
By Alex Frew McMillan
HONG KONG, July 16 (Reuters) - Sun Hung Kai Properties tapped two family members as the long-awaited "Plan B" for the company's top management after Hong Kong's anti-corruption agency on Friday charged its co-chairmen in a HK$34 million ($4.4 million) bribery scandal.
Co-chairmen Thomas and Raymond Kwok, Hong Kong's second-richest men after Li Ka-shing, elevated two of their sons as stand-in directors of the world's second-largest developer and promoted two other executives to support the chairmen while they defend themselves against the charges.
By looking within itself for executive answers, the company tried to signal its long-term succession plans, but at the same time opened itself to criticism that the family dynasty is unlikely to bring in top-ranking outside expertise.
"I think their overall response to this crisis from a corporate governance point of view is generally inadequate," said Jamie Allen, secretary general of the Asian Corporate Governance Association.
By staying on despite the case against them, the brothers "may not be breaching their fiduciary duty to the company, but certainly their duty of care that means you're supposed to be diligent and fully professional in the work you do as a director."
The two sons, Edward Kwok, 31, and Adam Kwok, 29, have Ivy League educations and both have worked in investment banking at Morgan Stanley. Adam worked at Morgan Stanley from 2005 to 2008 in New York and Hong Kong while Edward did a research internship in Hong Kong in 2003.
The two have rarely featured in Hong Kong's social scene or in its tabloid press. Edward, Raymond Kwok's eldest son, graduated from Yale and worked as an accountant before joining the developer in 2010. Adam Kwok is Thomas Kwok's only son and graduated from Yale and from Harvard with an MBA. He took a post at the family business in 2008.
Hong Kong-based shareholder activist David Webb sees the executive changes announced Friday as window dressing.
"Putting the sons in as alternate directors doesn't do much, nor does changing the titles of two other directors," Webb said in an email. "It has always been a family-controlled company and the big decisions will still be made by the family."
REGENT MENTORS
The promotion of Mike Wong, a surveyor who heads project planning, and promotion of Victor Lui, the executive in charge of sales, to deputy managing director indicates that they are likely to act as "regents" until the younger Kwoks are ready to run the company.
"Adam and Edward need to grow into the job before they can be given full responsibility," former senior Sun Hung Kai employee Roger Nissim said. "Mike Wong and Victor Lui would be excellent mentors for them."
Nissim, who stepped down as manager of project planning in 2007, saw both younger Kwoks rotate through different departments during summer internships from college. Adam asked the right kind of questions and seemed smart, he recalled.
At $32 billion, Sun Hung Kai Properties ranks behind only U.S. shopping mall developer Simon Property Group 's $48 billion market cap. Despite the inexperience of the younger generation of Kwoks, they are expected to take the helm with help from the company's strong middle management rather than the company seeking a high-ranking external hire.
"It's a family run company, you can't escape that, and I don't see that really happening," Nissim said.
To Alfred Lau, a property analyst with Bocom International, Thomas and Raymond would only give up their roles if convicted of the charges, with a legal battle of seven years expected. Their sons are kings in waiting but will have to wait for coronation, he said.
"Naturally, we think these will be the two guys in the future, but what we have in mind is not the very near future," Lau said. "Unless it turns out in October both of the chairmen are behind bars."
LOW PROFILE
Sun Hung Kai's response to the bribery investigation by Hong Kong's Independent Commission Against Corruption (ICAC) has been to wall itself off. Staff members are required to surrender mobile phones ahead of meetings to prevent surreptitious recordings. All communications related to the family need to be cleared by the Kwoks' legal teams, according to a source who works with the company.
That fits with the low-profile nature of the Kwok family. They protect the privacy of the third generation of Kwoks carefully, to allow the children, either college students or recent graduates, to follow their own direction and in response to the kidnapping of elder brother Walter Kwok in 1997.
The developer's shares have underperformed other Hong Kong property stocks by around 15 percent, compared to the Hang Seng index, since the chairmen were arrested on March 29. The shares resumed trading on Monday and were down 1 percent.
($1 = 7.7573 Hong Kong dollars) (Editing by Matt Driskill)
Springsteen and McCartney silenced at long London gig - BBC News
Rock stars Bruce Springsteen and Sir Paul McCartney had the plug pulled on them after over-running at a concert in London's Hyde Park.
Headline act Springsteen welcomed Sir Paul on stage for renditions of the Beatles' I Saw Her Standing There and Twist and Shout.
But their microphones were turned off before they could thank the crowds.
Springsteen had exceeded the time limit for the Hard Rock Calling event after playing for more than three hours.
"It made for a slightly bizarre, anti-climactic end to what had been a fantastic show," said Stephen Robb, a BBC reporter who was at the event.
"The band obviously couldn't tell from on stage that the sound had been shut off.
"It just looked a bit like everyone was milling about on stage having forgotten how the show should end."
'Police state'Guitarist Steven Van Zandt, a member of Springsteen's E Street Band, was angered by the forced curtailment, accusing "English cops" of preventing "80,000 people having a good time".
"When did England become a police state?" he wrote on Twitter.
"English cops may be the only individuals left on earth that wouldn't want to hear one more from Bruce Springsteen and Paul McCartney!"
According to Westminster Council, however, the decision to end the concert was made by its organisers and not local authorities.
"Concert organisers, not the council, ended last night's concert in Hyde Park to comply with their licence," said Leith Penny, Westminster Council's strategic director for city management.
"Licences are granted until certain times" - in this case 22:30 BST - "to protect residents in the area from noise late at night."
In a statement on the Hard Rock Calling website, the Live Nation company said it was "unfortunate" that the "three hour plus" performance had been "stopped right at the very end".
"The curfew is laid down by the authorities in the interest of the public's health and safety," the statement continued.
"Road closures around Hard Park are put in place at specific times to make sure everyone can exit the area safely."
Speaking on LBC on Sunday, Mayor of London Boris Johnson described the decision to end the concert as "excessively efficacious".
"If they'd have called me, my answer would have been for them to jam in the name of the Lord," he told presenter Kay Burley.
Song requestSpringsteen and his band had earlier performed such hits as Born in the USA and Because the Night before an estimated crowd of 65,000 people.
He had also invited Rage Against The Machine's Tom Morello on stage to perform two songs, while singer John Fogerty joined him for one.
Springsteen delighted one loyal fan who displayed a banner urging him to play a lesser known track, Take 'Em As They Come.
The artist said: "Tonight, my friend, this is your lucky night. You're going to hear this damn thing.
"It's a completely obscure track I wrote for The River when I needed some rock songs."
Grunge band Soundgarden appeared on Friday as part of this year's Hard Rock Calling concerts, while Paul Simon will take to the stage on Sunday.
Olympic Committee opens up the Games online - CBC
As the 2012 Summer Olympics approach, the International Olympic Committee is taking a huge step in loosening its restrictions on social media usage for athletes and the volunteers helping to put the events together.
"Allowing the athletes to use social media is a win/win situation," says Sidney Eve Matrix, associate professor in the Department of Media and Film at Queen's University. "Not only does it get everyone excited about the Olympics, but it also drives spectatorship and fandom."
The social media controls have been in place since 2000, when security concerns, privacy of athletes and the need to protect copyright were cited as reasons to crack down on the possibility of non-sanctioned communications. Sponsors pay a huge amount to secure the broadcast rights to the Games.
The IOC's decade-long hesitancy to allow those involved in the Games to communicate with fans and otherwise publish Olympics-related material online is weakening. Platforms like Facebook, Google+ and others are seeing a loosening of the rules similar to what happened around personal athlete blogs, which have been allowed since 2010.
Facebook has become an official partner with the 2012 Olympic Games for its social media outreach efforts.Volunteers for the Games were previously prevented from using any social media in regards to the Olympics. However, this year the IOC has decided to relax some of these rules for the 70,000 volunteers involved.
According to the IOC 2012 guidelines, volunteers and athletes are allowed to use social media websites like Twitter and Facebook. However, any comments or postings must be in a "first-person, diary-type format" and not come close to emulating the "role of a journalist" by commenting on separate events.
In any of their postings, they must also avoid mentioning:
- Details of their specific location,
- Media of backstage areas
- Breaking news
- Information about participants
- Detailed online discussions
In addition, they cannot report on any "accredited persons, or disclose any information which is confidential or private in relation to any other person or organization," limiting the information to personal, non-specific details only.
In places where broadcast rights have not been sold, the IOC will also provide live coverage through its official Youtube channel for free, accessible on smartphones and other online-capable devices.
Facebook and other platforms introduce dedicated portals
As a result of the changes to the social media rules, Facebook announced the creation of a community portal in June to highlight the "athletes, national teams and individual sports, with broadcasters and sponsors" involved in the Olympics.
“These Olympics, every story has the potential to be heard," said Joanna Shields, vice-president and managing director at Facebook. "On Facebook, all athletes can have an audience, and every fan can track how their heroes are doing, support them, encourage them, and share their stories with the world."
Even so, the IOC is still barring Facebook from allowing advertising on any Olympics-related pages. In addition, the IOC has launched Olympic partnerships with other prominent social media platforms, including Google+, Twitter and Foursquare.
Personal photographs can posted to these sites, but cannot be commercially distributed elsewhere. A caveat to this is that any pictures taken in the Olympic Village must be vetted first by those pictured.
Videos can be shot but cannot be posted online or elsewhere in any form. Once in the stadium, only official sponsors are allowed to take video and still shots.
Regardless of the limitations, inside perspectives on the Games from athletes and volunteers provided through social media could help increase fan engagement.
Olympic athlete Sarah Stevenson is staying away from Twitter for the duration of the Games, regardless of the rule change. (AP Photo/Matt Dunham)"It also is really good for the athletes themselves to demonstrate what it takes to be a world class Canadian athlete," says Matrix. "What kinds of people are behind these medals and these teams? They will serve as models and mentors for our next generation if they can show us how to use [social media] responsibly."
However, a fear of the pitfalls posed by accidentally violating these rules has discouraged some athletes from using social media at all during the Games, as any mistake could mean the end for them as far as the IOC is concerned.
Athletes like Sarah Stevenson and Rebecca Adlington, both avid twitter users, have decided to severely cut down on posting activity while participating in the Games.
Social media engagement a bulwark against online impotence
The IOC continues to be ferociously protective of its copyright online, despite its greater freedom it affords to its athletes. In May, Twitter suspended the account of Space Hijackers, an anti-capitalism protest group, at the request of Olympic organizers due to fears that the group's use of an altered London 2012 logo might imply an association with the Games.
“We were surprised that at the reaction of Twitter and the speed with which the account has been suspended," said a spokesman for Space Hijackers. "Twitter portrays itself as a hero of free speech especially during events such as the Arab Spring.
"And yet, when a big corporate organization gets in touch about a logo – which is clearly not tied to the official Olympics Twitter account, Twitter sides with the corporate."
As social media and technology become common, the prevalence of independent content is leading experts to predict that the lack of fan engagement by the IOC may serve to render its strong-arm attempts at control impotent in the future.
In 2009, when the IOC was reconsidering the ban on all social media that it had enacted in 2000, Reuters editor-in-chief David Schelsinger emphasized the burgeoning role of social media in today's culture to the IOC Press Commission.
The broadcast 'gatekeeper' system was outdated, he said, explaining that social media, direct connections to athletes and rapid upload of information would degrade the value of existing revenue streams unless something changed.
Experts say the International Olympic Committee needs to engage more with fans online to stay relevant. (AP Photo/PA, Martin Rickett)"The old means of control don’t work," said Schelsinger. "The old categories don’t work. The old ways of thinking won’t work. We all need to come to terms with that."
Shortly afterwards, at the 2010 Vancouver Games, the IOC allowed athlete blogs for the first time. The guidelines from that year acknowledged that "blogging, in accordance with these guidelines, [is] a legitimate form of personal expression and not [a] form of journalism."
However, these blogs were prevented from using sound, video, official pictures, interviews, news or Olympic symbology. The word 'Olympic' could be used if it was not connected with a third party.
Matrix sees the introduction of blogs and now social media as a welcome change for the future of fan engagement at the Olympics.
"For their individual brands, and the brands of the team, it's really important for them to have authenticity," she says. "It personalizes and humanizes them; it's more interesting that way."
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