by Dow Jones
The conflict at City Developments Limited (CDL) has intensified between chairman Kwek Leng Beng and his son, CEO Sherman Kwek, leading to a halt on trading and the cancellation of the FY2024 results briefing on Feb 26.
In a statement, Kwek Leng Beng stated that Sherman Kwek, along with Philip Lee, Wong Ai Ai and other directors, have tried to seize control of the company and the board, violating corporate governance principles, SGX Listing Rules and the Code of Corporate Governance. They did this by bypassing the Nomination Committee twice to change the board’s composition and quickly making significant changes to board committees and the company’s governance.
To address this “coup attempt” and protect the company’s integrity, Kwek has filed court papers on Feb 25. He also intends to remove his son as CEO when the time is right and is exploring all legal options available to defend the interests of CDL and its shareholders.
Kwek Leng Beng highlighted that CDL has internal measures in place to ensure business stability even in the absence of a CEO. If Sherman is removed, the current COO, Kwek Eik Sheng, will serve as the interim CEO while the company looks for a professional CEO to lead it.
Kwek Leng Beng had previously attempted to dismiss his son on Feb 8, citing his role in the “irregular” appointment of two new directors as just one of many mistakes. The reconstituted board, led by Philip Lee, objected to this move, causing a clash.
Kwek Leng Beng listed several points against his son’s leadership, including the Sincere Property debacle that caused CDL to lose $1.9 billion in FY2020, and poor investment decisions in the UK property market leading to significant financial losses. He also noted that under his son’s leadership, CDL’s share price has continuously underperformed compared to its peers, causing investor confidence to decline and shareholder concerns to rise.
“As a father, it was a difficult decision to fire my son. I understand that young people may make business mistakes in their careers, but breaking corporate governance laws is unacceptable. As chairman, my responsibility is to CDL, its shareholders, and its future. I take my role seriously and prioritize all shareholders’ interests, not just my family’s. The stakes are too high to allow power grabs to destabilize the company,” said Kwek Leng Beng.
The company’s FY2024 results showed a 36.6% decrease in profits year-on-year, and its gearing ratio has risen to 117%. has reached out to CDL for comment.