(Bloomberg) -- Ten weeks into the protests that have rattled the Asian financial hub to its core, Hong Kong’s billionaires are beginning to break their silence as the costs of escalating violence mount.
Peter Woo, the largest shareholder and former chairman of developer Wheelock & Co., on Monday called on protesters to ease off after they notched a victory by blocking the government’s extradition bill. Sun Hung Kai Properties Ltd., controlled by the city’s wealthiest clan -- the Kwoks -- issued a statement Tuesday condemning violent protests.
The billionaires’ comments come as two months of unrest weighs on the territory’s stock market. Woo has had more than $1 billion wiped from his personal wealth.
Protests have moved to the city’s airport for the last two days, leading to a swath of canceled flights, following clashes that saw riot cops fire tear gas in a subway station and protesters lash out at undercover officers.
“It’s time to think deeply,” Woo wrote in Monday’s edition of the Hong Kong Economic Journal. “Going against the extradition bill was the ‘big tree’ of this movement. This one and only big appeal has already been accepted by the government, so this tree has fallen.” Some people are using the issue to “purposely stir up trouble,” he added.
Hong Kong’s unrest has spiraled since the initial anger was sparked by the proposed bill that would have allowed extraditions from the territory to mainland China. As graphic scenes of violence between police and protesters went viral on social media, a turning point came on July 21, when a mob of men attacked protesters with poles at the Yuen Long subway station.
The perceived passivity of the police response to that incident spurred outrage and shifted the protesters’ focus from the extradition bill to law enforcement and the territory’s government more broadly. Weakened by the turmoil, Chief Executive Carrie Lam has refused to resign. She has followed Beijing’s stance not to give in to protesters’ demands, which include an independent inquiry into the use of force by police and the release of detainees, following hundreds of arrests.
In his column, Woo focused on violence wrought by protesters, but not the actions of the police, who he described as “outnumbered.” Wheelock gets about 38% of its revenue from mainland China, making him one of the most exposed to China among Hong Kong’s property billionaires.
Signs of economic fallout from the constant turmoil are starting to show. Flanked by business leaders on Aug. 9, Lam said the aftershocks could hit Hong Kong’s economy like a “tsunami.” Last week, Wheelock’s Wharf Holdings reported falling underlying profit and said demand in Hong Kong weakened due to “travel advisories, economic slowdown, contracting exports/re-exports, falling retail sales, stock market jitters and the threat to employment.”
The Real Estate Developers Association of Hong Kong issued a statement Aug. 8 condemning violence and calling for peace. Seventeen members co-signed, including Woo’s Wheelock, as well as Sun Hung Kai and Li Ka-Shing’s Hutchison Properties. Another appeal published in Chinese-language papers was issued on Aug. 10, with co-signers including Kwok family members as well as billionaire Henry Cheng of New World Development.
Woo, Li and Cheng also were among billionaires who opposed plans for a mass sit-in targeting the city’s financial district in 2014. Cheng said at the time that the protests -- led by an activist group known as Occupy Central With Love and Peace -- could offend Communist Party leaders in Beijing and hurt the company’s jewelry sales in Hong Kong.
Sun Hung Kai, Hong Kong’s biggest developer, faced criticism after clashes last month at one of its malls in Sha Tin. The company denied protesters’ allegations that the firm invited the police into New Town Plaza. At the Harbour City center in Tsim Sha Tsui, owned by a unit of Woo’s Wheelock, protesters canceled a plan to swarm the mall in the wake of the New Town Plaza incident after management put up signs asking police not to enter unless a crime was taking place.
Sun Hung Kai issued a statement on Tuesday that criticized the protests.
“The recent series of violent acts to challenge the rule of law have damaged Hong Kong’s economy and seriously affect citizens’ daily life,” Sun Hung Kai said. The company would support efforts by the government and police to restore order, it said.
Aftershocks have spilled over into other industries. Protesters have been circulating a spreadsheet aimed at boycotting brands perceived to be supportive of the establishment, while China has also been exerting economic pressure. Cathay Pacific Airways Ltd. staff who join the protests face a ban on flights to the mainland, and the Gianni Versace luxury brand apologized for a shirt that allegedly implied Hong Kong wasn’t part of China.
Cathay’s biggest shareholder, the billionaire Swire family’s Swire Pacific Ltd., called for “restoration of law in order” in a statement Tuesday. “We must act now to stop the violence and preserve the stability, peace and prosperity of Hong Kong,” it said, adding that the company fully supports Cathay Pacific’s “strict implementation” of Chinese regulators’ “directives to ensure safety, and its zero-tolerance approach to illegal activities.”
Some development tycoons say Hong Kong’s population has reason for discontent. Lan Kwai Fong Group head Allan Zeman said on Bloomberg TV Monday that urgent solutions are needed to address the territory’s housing crisis.
“A lot of these people, I don’t blame them for marching because they don’t have hope,” said Zeman, whose holdings spanning Hong Kong, mainland China and Thailand include the city’s California tower. “They live with their parents, they don’t see a future for themselves.”
(Updates with Swire statement in 14th paragraph.)
--With assistance from Venus Feng.
To contact the reporters on this story: Blake Schmidt in Hong Kong at firstname.lastname@example.org;Sheryl Tian Tong Lee in Hong Kong at email@example.com
To contact the editors responsible for this story: Pierre Paulden at firstname.lastname@example.org, Keith Campbell, Marion Dakers
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