Explainer | Are New World’s damage-control measures in the wake of The Pavilia Farm debacle enough? Experts weigh in on the issue

The Pavilia Farm debacle is the first major test of Adrian Cheng Chi-kong’s leadership since he took over as executive vice-chairman of New World in 2017

While market observers have lauded the company’s initial response to the crisis, they say that the company has a long way to go to rectify the underlying issues

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A general view of The Pavilia Farm residential project in Tai Wai. New World Development will pull down and rebuild the existing floors of towers one and eight due to some construction defects. Photo: May Tse

Published: 10:30am, 10 Jul 2021Updated: 10:42am, 10 Jul 2021

New World Development’s decision to tear down and rebuild two of the seven blocks at The Pavilia Farm residential project in Tai Wai has shocked Hong Kong, wiping out more than HK$6.6 billion (US$850 million) in market value in just two days.

The market is closely watching how CEO and executive vice-chairman Adrian Cheng Chi-kong handles the company’s biggest crisis since he took over in 2017. He is the third generation of the Cheng family to lead New World Development, which was founded by his late grandfather, Cheng Yu-tung, in 1970.

New World did not waste any time in coming up with a compensation package, which analysts say is more than adequate, to allay the fears of 846 affected buyers of flats in the project, the biggest launch under his leadership.

Nearly 98 per cent of the 3,090 units at The Pavilia Farm, which is being developed in three phases, have been sold as of June 30.

Adrian Cheng Chi-kong, CEO and executive vice-chairman of New World Development. Photo: Xiaomei Chen

The generous compensation package reflects his stated stance that social responsibility matters more than profits. In an exclusive interview with the Post in November 2020, Cheng said: “In the next 10 years, nobody will ask [which developers] are the biggest or smallest, but rather they will care about their social impact on society.”