Hong Kong's Independent Commission Against Corruption on Thursday arrested the chairmen of Sun Hung Kai Properties, brothers Raymond and Thomas Kwok, on suspicion of corruption, the company said.
The Kwoks own $18.3 billion (11.5 billion pounds), the second-biggest family fortune in Hong Kong after Asia's richest man, Li Ka-shing, founder of rival developer Cheung Kong (Holdings), according to Forbes magazine.
The company issued a statement saying the Kwoks would continue with their duties as chairmen and managing directors of Sun Hung Kai, Asia's largest developer by market value, and that normal business operations would not be affected.
The ICAC also said it had arrested a former senior government official, whom the South China Morning Post identified as former chief secretary Rafael Hui, who has worked as a special adviser to Sun Hung Kai.
The ICAC announced on its website that the people arrested, whom it did not identify, were alleged to have committed offences under the Prevention of Bribery Ordinance and misconduct in public office.
Two senior executives of a listed company in Hong Kong and a former principal official of the Hong Kong Government have been arrested for suspected corruption, the ICAC said in a statement.
Gary Plowman, a former government prosecutor, said he had been to the ICAC and was representing one of the arrested parties whom he declined to identify.
Nobody has been charged, Plowman said. As for what happened next, that was a very good question.
We react, we're not proactive. We are reactive in these situations, he said.
The ICAC was set up in 1974 to root out what was seen as widespread corruption in the Hong Kong government at the time, especially in the police.
It acts as a law-enforcement agency, able to arrest and detain suspects, and prosecutes cases in conjunction with advice from the Department of Justice.
Steve Vickers, former commander of the police Criminal Intelligence Bureau and now CEO of a risk and security consulting company, said the timing of the case was interesting, in the context of popular sentiment against property developers and rising house prices.
These cases are notoriously difficult to prosecute, he said. It will be interesting to see whether charges emerge or not.
Over the past four decades, Sun Hung Kai, listed in 1972, has built some of the city's most expensive property, including luxury hilltop apartment blocks and harbour-front skyscrapers, including Hong Kong's tallest building, the International Commerce Centre on the Kowloon peninsula.
The company said 10 days ago that Thomas Chan Kui-yuen, a Sun Hung Kai Properties board member and the executive responsible for project planning and land acquisitions, had been arrested for suspected bribery.
Cable TV footage on Thursday showed Raymond Kwok entering the ICAC premises in a limousine, flanked by two unidentified men. The station also showed images of a lawyer for Thomas Kwok going into ICAC headquarters.
It was not clear if the suspects were being held.
Shares in Sun Hung Kai Properties were suspended in Hong Kong on Thursday, as was trading in two of its subsidiaries, mobile phone company SmarTone Telecommunications and data-centre operator SUNeVision Holdings.
Sun Hung Kai has made an application to resume trading on Friday.
The Kwoks took the helm at Sun Hung Kai after a bitter family feud in 2008, which ended with eldest brother and then-chairman Walter Kwok Ping-sheung being demoted.
One analyst, who did not want to be identified given the sensitive nature of the issue, said any involvement of Hui, chief secretary from 2005 to 2007, suggests the case dates back many years.
It has to be a very old project, the analyst said.
Sun Hung Kai was down 1.51 percent before the suspension.
(Editing by Nick Macfie)