Almost $5 billion was wiped off Hong Kong's Sun Hung Kai Properties Friday after co-chairmen Thomas and Raymond Kwok, two of the city's richest men, were arrested in a major corruption probe.
Shares in the real estate blue-chip giant plunged more than 13 percent in response to the arrest of the brothers, who head one of Asia's wealthiest families, over bribery allegations on Thursday.
The Independent Commission Against Corruption (ICAC) said two senior executives and the former number two to the city's Chief Executive Donald Tsang had been detained in connection with alleged bribery offences.
It has not named the suspects but Sun Hung Kai confirmed the billionaire brothers' arrest in a statement to the Hong Kong stock exchange late Thursday.
"The company has been required to provide certain information with regard to the allegations to the ICAC pursuant to a search warrant pertaining to the company's premises," the developer said.
The Kwoks had the full backing of the board and would continue in their current roles as co-chairmen and managing directors, it added.
State-run RTHK television said the city government's former chief secretary Rafael Hui had also been arrested. All three suspects were released after several hours of questioning, local media reported.
Hui was a key ally of the outgoing Tsang, who is also facing corruption allegations over favours he received from some of the city's powerful tycoons, including trips on luxury jets and yachts.
The case raises fresh questions about the often cosy ties between Hong Kong's family-run business empires and its Beijing-backed political leaders.
Conflicts of interest and the power of the tycoons were key themes in last weekend's "small-circle election", which saw a pro-Beijing committee stacked with members of the business and political elite choose a wealthy property consultant to replace Tsang in July.
Sun Hung Kai is the global financial centre's biggest property developer by market capitalisation and the owner of some of the city's most prominent landmarks.
The Kwoks are Hong Kong's richest real estate moguls with an estimated family wealth of $18.3 billion, second only to the city's richest man, Li Ka-shing, according to Forbes magazine.
The ICAC arrested senior Sun Hung Kai executive Thomas Chan earlier this month in relation to the same bribery case. He has been released and is reportedly back at work.
No details of the allegations have been released, but the South China Morning Post newspaper quoted unnamed sources saying they included millions of dollars in debts linked to Hui, a luxury apartment and irregularities over land deals.
Hui stepped down as an independent director of AIA Group to "attend to other commitments," the insurer said Thursday.
The case comes months after the Kwok brothers took over the running of the company from their 82-year-old mother late last year, and four years after a public falling out with their elder brother Walter, who remains a non-executive director.
Analysts said that while the damage to the company's share price might be exaggerated, the allegations would hurt the company's corporate image.
"The arrests are unlikely to have any immediate impact on SHKP's daily operations because it is a well-established company. But the magnitude and scope of the ICAC investigation remains uncertain," Standard & Poor's credit analyst Bei Fu said.
Sun Hung Kai shares bounced off their early lows but still ended the day down 13.1 percent at HK$96.50. Trade in the company accounted for more than 15 percent of the market's turnover of HK$73.68 billion ($9.45 billion).
The group has properties around Asia, including Hong Kong's Four Seasons Hotel, International Finance Centre and recently developed International Commerce Centre, the city's tallest building.
"Maintaining high standards of corporate governance is always an integral part of the group's business philosophy," it said in the earnings report.
Sun Hung Kai earlier reported an interim net profit of HK$21.13 billion ($2.72 billion) for the six months to December 31, 2011.