Sun Hung Kai said in a statement that Walter Kwok, the eldest of three Kwok brothers and a non-executive board member, told the company he was arrested late on Thursday by the Independent Commission Against Corruption (ICAC).

Walter Kwok, ousted as Sun Hung Kai chairman in 2008, had previously denied any involvement in the investigation that has seen the arrest of Thomas and Raymond Kwok and Rafael Hui, Hong Kong's chief secretary from 2005-07.

The Kwoks, valued by Forbes magazine at $18.3 billion in March, before the arrests, are the second-wealthiest family in Hong Kong after Asia's richest man, Li Ka-shing, founder of rival developer Cheung Kong (Holdings)(0001.HK).

Shares of Sun Hung Kai Properties, Asia's largest developer valued at $32 billion, fell more than 2 percent - to their lowest in nearly 5 months - when they resumed trading after having earlier been suspended. The stock has dropped around 15 percent since co-chairmen Thomas and Raymond Kwok were arrested on March 29 on suspicion of corruption, and later released on bail.

A spokeswoman for Sun Hung Kai said the company had nothing further to add to a stock exchange filing, which said the arrest would not affect the group's operations. Walter Kwok declined to comment, with a spokeswoman referring inquiries to the company statement. An ICAC spokeswoman said the agency expects to issue a statement later on Friday.

Thomas and Raymond Kwok deny any wrongdoing, and no charges have been laid by the ICAC.

After being forced from the top of the company, Walter Kwok has remained on Sun Hung Kai's board but has not attended board meetings.

A long-running dispute over the family trust that controls Sun Hung Kai has also resurfaced. Walter was removed as a beneficiary of the trust in 2010 and is trying to gain access to trust documents.

Sources close to the family have said Walter Kwok lost arbitration in Switzerland, and family matriarch Kwong Siu-hing in 2010 intended to split ownership of the trust into three parts, including a portion for the benefit of Walter Kwok's family.

Sun Hung Kai shares last traded down 0.7 percent at HK$93.65, in line with the benchmark Hang Seng index .HSI.

(Additional reporting by Twinnie Siu; Writing by Denny Thomas; Editing by John Mair and Ian Geoghegan)

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