CDL executive chairman Kwek Leng Beng (left) has filed court papers against his son and group CEO Sherman Kwek (right). - LIANHE ZAOBAO FILE By Angela Tan
SINGAPORE: Sherman Kwek, group chief executive officer of City Developments Limited (CDL), on Wednesday (Feb 26) expressed his disappointment over the “extreme actions” taken by his father Kwek Leng Beng over a disagreement around the size and make-up of the board of the property group.
“It is incredibly disappointing that our chairman and a minority of the CDL board have decided to take these extreme actions regarding this disagreement around the size and make-up of the CDL board,” said Sherman Kwek in a statement on behalf of the majority of the CDL board of directors.
He added that the focus of the CEO and the company’s directors has always been to implement steps to improve governance.
This comes after CDL executive chairman Kwek Leng Beng on Feb 26 said that he has filed a lawsuit to address the “attempted coup” by his son Sherman, 49, board members Philip Lee and Wong Ai Ai, as well as a group of directors acting with them to allegedly consolidate control of CDL’s board.
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The older Kwek claimed that Sherman Kwek’s group had bypassed the nomination committee (NC) on two occasions to change the board composition, and hastily followed up by making significant changes to board committees and CDL’s governance.
He also questioned the appointment of two new independent directors – Jennifer Duong Young and Wong Su-Yen – without proper vetting and bypassing the NC.
“I was left with no choice but to send an e-mail on Feb 8, 2025, seeking Sherman’s dismissal from the position of group chief executive officer. His role in circumventing good governance and consolidating power through the irregular appointment of two new directors was the latest of a long series of missteps,” the older Kwek said.
Sherman Kwek stated that this legal action was taken despite it not being authorised by the majority of the board. “To reiterate, this has never been about ousting our esteemed chairman,” he said.
Instead, these steps were taken to strengthen CDL’s board to ensure the group has the highest standards of governance and that the collective decision-making as a board is as robust as possible.
“As the matter is now before the courts for adjudication, we will not comment on the merits of the case and will make further announcements if there are any material developments,” he said.
Sherman Kwek will remain as group CEO of CDL “until such time as there is a board resolution to change company leadership”, the company said in a Feb 26 statement.
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CDL added that business operations remain fully functional and unaffected. Trading in its shares was suspended on Feb 26.
Speaking to The Straits Times, Philip Yeo Liat Kok, an independent director of CDL who sides with Kwek Leng Beng, said the purpose of going to court is “to get a declaration that the appointment of the two new directors was illegal or invalid and to restore the board committees and management of the subsidiaries to their original composition”.
On whether Kwek Leng Beng had spoken to his son about these concerns and if other methods were sought to address the disagreements, Yeo said: “Despite repeated counsel by myself and other directors and even after obtaining legal advice, they still persisted with their unilateral actions, in breach of corporate governance. We then had no choice but to file the court papers.”
Kwek Leng Beng said the move is about “upholding good corporate governance and protecting the interests of all shareholders and stakeholders”.
“We have to look to the future. We have stated our intention to hire a professional CEO,” he said in response to ST queries on whether the issues arose from generational differences in management style and goals.
“In the interim, we will have Kwek Eik Sheng, our group chief operating officer, to take over. We look forward to installing a professional CEO,” he added.
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Kwek Eik Sheng, who is in his early 40s, is the nephew of Kwek Leng Beng.
board committees and management of the subsidiaries to their original composition”.
He spent more than 10 years holding executive positions and handling business development for overseas projects at CDL, while acting as a non-executive director at the group’s hotel arm, Millennium & Copthorne Hotels.
News of the family discord at CDL took employees and analysts covering the Singapore property group by surprise.
“The undercurrent, if any, between Kwek Leng Beng and his son is not visible. In fact, during analyst briefings, Sherman would often praise the chairman, and vice versa,” said an analyst who has been following CDL for many years.
The analyst, who declined to be named, noted that it has been a rocky patch for CDL since the Sincere Property Group project, which led to the resignation of four out of its nine directors after the group reported a $1.9 billion loss in 2020. One of them was CDL’s former non-executive and non-independent director Kwek Leng Peck, who quit after more than 30 years in the role.
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Kwek Leng Peck, the cousin of billionaire CDL executive chairman Kwek Leng Beng and uncle of group chief executive Sherman Kwek, has served on the board for more than 30 years. CDL announced that Kwek Leng Peck gave notice of his resignation with effect from Oct 19, 2020.
Kwek Leng Peck is the cousin of Kwek Leng Beng and the uncle of Sherman Kwek.
At the time, Kwek Leng Peck cited disagreements with the board over CDL’s investment in Sincere, as well as its continuing provision of financial support to the Chinese property group.
He also had reservations over the group’s approach in managing its London-based unit Millennium & Copthorne Hotels.
When ST arrived at CDL’s office on the 12th floor of Republic Plaza at around 11.30am on Feb 26, it appeared to be business as usual. Around noon, small groups of workers were seen taking the lift down for lunch.
Staff enter the CDL office at level 12 of Republic Plaza on Feb 26, 2025.
While some whom ST spoke to declined to comment, one employee looked surprised when asked about the latest developments and said he did not know anything about it. He added that there were no announcements made, and it had not affected staff.
A staff member noted that while employees usually see Sherman Kwek around, they had not seen him in the office on Feb 26.
So far, shareholders seem to have taken the news positively. While trading in CDL remains suspended, the order queues came in at $5.17, up five cents from its closing price on Feb 25. - The Straits Times/ANN
