HONG KONG: Hong Kong property behemoth New World Development announced Thursday that its chief executive officer Adrian Cheng has been replaced, as the firm reported an annual loss of over US$2.5 billion. The move has shaken up the sprawling business empire run by Hong Kong’s third-richest family at a time when the Chinese finance hub has been hit by a prolonged slump in the housing market. “Dr Cheng Chi-Kong, Adrian has tendered his resignation as the chief executive officer of the Company to devote more time on public services and other personal commitments,” the company said in a filing to Hong Kong stock exchange published around 4:45 pm.

It added that he would be replaced with immediate effect by its chief operating officer Ma Siu-cheung, a former Hong Kong development minister also known as Eric Ma. “(Ma) will no longer serve as the chief operating officer of the Company,” it said. Share trading in New World Development in Hong Kong will resume when markets open Friday, ending a day-long trading suspension which also affected the retail unit New World Department Store China. On Thursday, the firm also announced losses attributable to shareholders totaling HK$19.68 billion (US$2.5 billion) in the year ending June 30, 2024 - which will mark New World’s first annual loss in two decades.

In that period, core operating profit fell 18 percent to HK$6.9 billion. Cheng, 44, is a grandson of late billionaire Cheng Yu-tung and was once considered the heir apparent in the sprawling business empire which spans property, jewelry, department stores and logistics. The Cheng clan is valued at US$22.1 billion by Forbes magazine. Cheng joined the board of New World Development in 2007 as its executive director and was appointed its CEO in 2020, when the company’s revenues slumped by nearly a quarter mid-year to mid-year. He launched the “K11” brand which aimed to mix culture, art and retail, and was credited as the driving force behind two high-end malls in Hong Kong.

Cheng will take on the role of a non-executive vice-chairman of New World, the company said Thursday. The property arm is the largest unit of New World, controlling HK$470.2 billion in assets by the end of 2023. New World’s shares have fallen by about a third since the turn of the year as Hong Kong suffers the longest property market downturn since the SARS outbreak in 2003. The city has lost at least HK$2.1 trillion since 2019, according to a Bloomberg Intelligence analysis in June. — AFP