HONG KONG – New World Development suspended trading of its shares in Hong Kong the morning of Sept 26, amid reports that chief executive officer (CEO) Adrian Cheng is poised to step down.
The property developer owned by the billionaire Cheng family is considering replacing the third-generation scion as CEO after write-downs that led to the company’s first annual loss in two decades, people familiar with the matter told Bloomberg on Sep 25. .
Media outlet HK01 reported Mr Cheng, who currently is also the executive vice chairman, will become non-executive vice chairman, while chief operating officer Eric Ma will replace him as CEO.
New World Department Store China has also halted trading. The company did not respond to a request for comment on the media reports.
The major Hong Kong property developer is due to announce its earnings for the financial year ended in June later on Sept 26. The company has flagged a net loss of as much as HK$20 billion (S$3.31 billion) for the period.
The Cheng family is one of the most powerful in the financial hub, after late billionaire Cheng Yu-tung built a conglomerate spanning from infrastructure to transports, and retail to insurance.
Mr Adrian Cheng, 44, took over the top job at New World from his father, Mr Henry Cheng, in 2020, and expanded its business quickly in both Hong Kong and mainland China, building many large-scale projects including flagship K11 shopping malls and offices with his passion for art and culture.
However, hit by the pandemic and faced with a prolonged slump in retail markets and surging interest rates, the developer’s gearing ratio ballooned to among the highest of its peers, worrying investors who have already lost billions of dollars from defaults by Chinese property developers.
New World said this
