In a recent statement, City Developments (CDL) executive chairman Kwek Leng Beng has declared that the company’s “serious lapses” in corporate governance have come to an end. The announcement came after a court hearing on Feb 26, where it was revealed that the two newly appointed directors, Jennifer Duong Young and Wong Su Yen, have agreed not to exercise their powers until further notice from the court.
According to Kwek, these two directors were “irregularly and hastily” appointed on Feb 7 through written resolutions by the board. The court also suspended the actions of the newly constituted nominating and remuneration committee.
Kwek also mentioned that his son, Sherman Kwek, Philip Lee, Wong Ai Ai, and other directors acting in concert with them have committed not to make any further changes to the board committees and the management of certain CDL subsidiaries until the court’s decision is released.
He emphasized that strong corporate governance is crucial for a sustainable and successful business. It ensures transparency, accountability, and responsible decision-making, which are essential for maintaining investor confidence and protecting the interests of shareholders.
In a surprising move, CDL called for a trading halt and canceled its FY2024 results briefing, which was supposed to take place later that day. The company cited a “disagreement” within the board regarding the board’s composition and constitution as the reason for the temporary suspension.
Despite this development, Kwek reassured that the company’s operations remain fully functional and unaffected. He also confirmed that Sherman would continue to serve as the group’s chief executive officer until a board resolution is passed to change the leadership.
In his initial statement, Kwek accused his son, Lee, Wong, and a group of directors of trying to gain control of the board and the company. He filed court papers on Feb 25 to address the “attempted coup” and protect CDL’s interests. Kwek also mentioned that they are exploring all legal options available to defend the company and its shareholders.
If Sherman is removed as CEO, Kwek EIk Sheng, the current chief operating officer (COO), will serve as the interim CEO. The company’s shares were last traded at $5.12 before the trading halt on the morning of Feb 26.