Kwek clan's decision on family feud will be critical to CDL's future

With 49% holdings, the wider family holds key to true resolution of father-son tussle

- Angela Tan

The outcome of an ongoing boardroom battle involving father and son at one of Singapore's largest property companies is being determined by the Singapore courts, but the future of property developer City Developments Limited (CDL) may well lie in the hands of the wider Kwek clan.

Last week, Mr Kwek Leng Beng accused his son and a group of directors of an attempted coup. Mr Kwek also alleged that there were major lapses in CDL's board independence and governance issues—all of which have cast a shadow on the hotel and property group's future.

In response, his son Sherman Kwek has denied any attempt to oust the 84-year-old chairman.

Market observers were surprised that the discord between father and son culminated in court papers filed on Feb 26 against Mr Sherman Kwek and six independent directors.

The move was aimed at getting the court to grant interim injunctions to prevent them from implementing certain resolutions, restrain two independent directors from exercising their powers, and reverse several previously passed resolutions.

Some observers felt this indicated that the older Mr Kwek's position in CDL might not be as strong as widely believed.

This is because the battle will not be won in court, said analysts who have covered CDL for decades.

True resolution will come when the Kwek clan decides to act, they said.

Currently, about 51 per cent of CDL is held by the public. The remaining 49 per cent is held by the wider Kwek clan through various investment vehicles.

These vehicles include Hong Leong Investment Holdings (HLIH), which has an 18.9 per cent stake in CDL, while HLIH-controlled Hong Leong Holdings has a 16.7 per cent stake, according to data from analytics firm Handshakes.

Other entities controlled by the Kweks hold the remaining 13.7 per cent stake, making up the 49 per cent in CDL held by the wider Kwek family.