SUN Hung Kai Properties Ltd, Hong Kong's biggest developer, replaced Chairman Walter Kwok with his mother, seeking to end a feud that has gripped the city and split its second-richest family.

"Walter has ceased to be the chairman and chief executive," the company said in a filing to Hong Kong's stock exchange yesterday. Kwong Siu-hing, 79, was appointed chairman.

Sun Hung Kai rose in Hong Kong trading after the decision, extending a rebound from a slump that erased more than US$4 billion of market value. Walter, who became chairman in 1990 after his father's death, lost a court battle with younger brothers Thomas and Raymond on Monday to block a vote on whether to oust him.

"The market welcomes this change," said Raymond So, associate dean of the Faculty of Business Administration at Chinese University of Hong Kong. "The company is on its way back on track. What new direction Sun Hung Kai may take remains to be seen."

The dispute aired squabbles over the company that built Hong Kong's highest skyscraper and is the foundation of the Kwok family's combined wealth of US$24 billion, second only to Li Ka-shing on Forbes Magazine's list of Hong Kong's richest.

Walter Kwok said in a court filing that his brothers tried to remove him because he was suffering from mental illness. Walter, 57, who has been on leave for personal reasons since February 18, said he doesn't have any such disorder and is suing his siblings for libel.

Shares climb

"Investors were obviously concerned about who's going to be in charge," Wilson Hung, an analyst at Hong Kong-based brokerage Quam Ltd, said before yesterday's announcement. "They were worried that if this keeps dragging on it will ultimately impact the company's business."

Sun Hung Kai rose 0.9 percent to HK$126.80 (US$16.25), the biggest two-day gain in three weeks. The stock is down 23 percent this year after jumping 85 percent last year.

"Madam Kwong has over 40 years of experience in real estate business," the statement said. She "is well respected by the board."

Brothers Raymond and Thomas will assume the CEO duties though not the title, according to company spokeswoman Fiona Wan.

Listed on the Hong Kong stock exchange in 1972, Sun Hung Kai benefited from a three-decade surge in home prices to become the city's biggest developer.