The arrest on Thursday of billionaire brothers Thomas and Walter Kwok together with former Chief Secretary Raphael Hui was high theater even for a city that is accustomed to drama and thrives on it. Spectacle aside, the fall of three of Hong Kong’s biggest players will be remembered as the event that symbolizes the Hong Kong of the immediate post-colonial period, much as the spectacular bankruptcy of the Carrian Group became a symbol of the corrupt, casino style of Hong Kong business in the years of the Sino-British negotiations. The Independent Commission Against Corruption played a leading role in the collapse of Carrian in 1983, viewed as its greatest triumph until the Kwoks and Mr. Hui were called in for questioning on bribery charges on March 29, 2012. The story line has changed, however, and everyone in Hong Kong knows it. If 1983 was about businessmen running amok as Britain mulled the terms of Hong Kong’s surrender, 2012 is about the corrupt relations between Hong Kong business and government.

It would be easy to say the corrupt relations between Hong Kong government and the property sector, except that the major property companies have complex ownership structures that bear more than a passing resemblance to Korean chaebol or Japanese keiretsu. The property piece creates predictable cash flow – along with utilities – that allows the controlling shareholders, all families in Hong Kong’s case, to engage in risky and usually profit-making business of all sorts. Within Hong Kong, the tycoons appear to have a gentleman’s agreement limiting competition to no more than two per sector, usually with some form of geographic separation made easy by Hong Kong Island’s status as a well, island, against Kowloon and the New Territories. While this may be an over-simplification, it is made possible by a government that looks determinedly the other way. More than 45 percent of the government’s budget comes from land including land premiums paid by the developers, and unlike taxes the use of land revenues is at the sole discretion of the government. No wonder it becomes a huge decision when and how to release government land for bidding auctions whose floor prices are so high that they keep out all but the handful of property companies that already monopolize the market.

Sun Hung Kai, of course, is one of the monopolists, with a market share of 26 percent of new residential property in 2011, trailing only Cheung Kong Holdings with 52 percent. In 2010 it had a 35.7 percent share of the market compared to Cheung Kong’s 39 percent, although its share is predicted to fall to 20.6 percent in 2011 and Cheung Kong’s to 11.7 percent (Data from the South China Morning Post Property Section, 3/28/2012). In the 1980s, it was considered one of the most professionally managed Asian companies, partly because of its three young, western-educated brothers, and partly through ventures such as its partnership with Bear Stearns. Raymond Kwok, 58, is a fixture on the social scene and as likeable and approachable as many others of the city’s big guns of that generation. Thomas Kwok, 59, is a member of the executive committee of the Real Estate Developers Association and holder of a Silver Bauhinia Star.

Everything went along smoothly until September 29, 1997, when Walter Kwok, the eldest brother, was kidnapped by legendary bandit “Big Spender” Cheung Tze-keung. His brothers and mother refused to put up the HK$600 million in ransom money, which was paid six days later by his wife, Wendy Li. Initially he refused to contact his family at all until Big Spender put him in a cardboard box to think about it for a while. About the same time as the abduction, however, Walter took up with an old girlfriend, Ida Tong, and the relationship became ever more central to his affairs. In 2008, the brothers’ mother, Madame Kwong Siu Hing, pushed Walter out of the company when he attempted to gain a board seat for his lover. Now it is widely assumed that Walter tipped off the ICAC and has been providing the crime busters with the internal evidence they need to expose dealings between the brothers and the former chief secretary, Mr. Hui. Among other things being investigated is a 4,000 sq.ft. apartment leased by Sun Hung Kai to Mr. Hui in one of Hong Kong’s most expensive and prestigious buildings, the Leighton Hill.

For most Hong Kongers, the specifics are just detail. My friend Ling Ling says: “Of course there were pay-offs” and the Kwok brothers are far from alone. The Hong Kong system post-1997 has been one that needs a strong hand from government and hasn’t gotten one. Instead, political leadership has been timorous and at the mercy of every special interest group, of which the property sector is merely the strongest. The result has been the creation of a pampered elite, a government that substitutes opinion polls and consultations for accountability, and a public that increasingly feels like losers – unless they happen to own property, in which all they want is for the game to go on, and on, and on.