CDL in global spotlight as father, son tussle for board control

Shares of OCBC, Yangzijiang take beating despite firms reporting surge in net profit

- Kang Wan Chern

City Developments Limited (CDL) made global headlines last week, when Mr Kwek Leng Beng took his son Sherman Kwek and several other board directors to court on Feb 26 over an "attempted coup" to allegedly seize control of CDL's board.

The ensuing tussle for control could be long and painful, not just for father and son, but also for the company's corporate governance reputation among investors. Minority shareholders are already grappling with a wave of analyst downgrades due to potential leadership changes and uncertainty over the company's outlook.

Mr Kwek Leng Beng, 84, is executive chairman of CDL, while Mr Sherman Kwek, 49, is its group chief executive. CDL, a leading Singapore property developer, is behind iconic real estate projects that include The Orie in Toa Payoh, Republic Plaza and the South Beach mixed development.

CDL shares were halted from trading and a press conference to announce the company's 2024 results was abruptly cancelled on Feb 26, as a battle for board control began to unfold.

Mr Kwek Leng Beng is alleging that his son and four directors acting with him bypassed the nomination committee, appointed two independent directors against legal advice and restructured key committees to sideline him as executive chairman. He has also called for the removal of Mr Sherman Kwek as group CEO.

The nomination committee of a board of directors is responsible for overseeing the selection, appointment and evaluation of board members and senior executives.

Excluding the two new independent directors, there are nine directors on CDL's board. Four are on Mr Sherman Kwek's side, while three, including former Economic Development Board chairman Philip Yeo, are siding with Mr Kwek Leng Beng. The older Mr Kwek also controls CDL's parent, Hong Leong Group.