For City Developments, Feb 26 was supposed to be an eventful day, as it was scheduled to announce its FY2024 results. The market was expecting a softer set of numbers, no thanks to persistently-high interest costs that affected all property players.
At 8.02am, just half an hour after the FY2024 results were released on the SGX website, CDL called for a trading halt. This was unusual as results are typically released before market trading begins so that investors have time to react. At 8.34am, CDL issued a terse announcement cancelling the 10am briefing — catching its own employees setting up the venue at M Hotel by surprise.
The subsequent statement shook Corporate Singapore: Kwek Leng Beng, CDL’s executive chairman, said he is taking his son, group CEO Sherman Kwek, and a group of other directors to court for trying to “circumvent” good governance and for an “attempted coup”.
According to Leng Beng’s statement, Sherman, Philip Lee, Wong Ai Ai, with the support of other directors Desbaillets Daniel Marie Ghislain and Carolina Chan, have sought to consolidate control of the board. Leng Beng, meanwhile, is backed by three other directors: Philip Yeo, Colin Ong and Chong Yoon Chou.
According to Leng Beng’s statement, two additional independent directors — Wong Su Yen and Young Jennifer Duong — had been nominated hastily without alerting Chong, the Nomination Committee (NC) chairman.
“Contrary to established corporate governance principles, the SGX Listing Rules and the Code of Corporate Governance, they bypassed the NC on two occasions to change the composition of the board and hastily followed up by making significant changes to board committees and the governance of the group,” says Leng Beng.
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By taking Sherman and his faction to court, Leng Beng, along with board members who issued court papers on Feb 25, want to “set things right” and “restore corporate integrity”.
Leng Beng says that at the appropriate time, he wants to “change the CEO” and “explore all legal options available to us to vigorously defend and protect the interests of CDL and its shareholders”.
In the court papers, the applicants want the court to restrain Wong Su Yen and Young Jennifer Duong from exercising the powers of a director. The three of them, along with Wong Ai Ai, Sherman, Chan and Ghislain, are also restrained from doing any acts pursuant to or in furtherance of the Directors’ Resolution in Writing (DRIW) dated Feb 21.
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Lee, Wong Ai Ai, Sherman, Chan and Ghislain are also directed to take necessary steps to reverse the effects of the resolutions purportedly passed under the Feb 21 DRIW, including, but not limited to, voting in favour of any board resolution to be passed. All seven parties involved are also directed to pay for damages incurred.
Blame game
According to the statement by Leng Beng, this is not the first time Sherman’s decisions have put CDL in a “precarious position”.
According to Leng Beng, Sherman was responsible for the botched acquisition of China developer Sincere Property, which led to a massive $1.9 billion loss in FY2020.
Differences over the Sincere deal led to the abrupt resignation of Kwek Leng Peck from the CDL board in October 2020. Leng Peck, who had served some three decades on CDL’s board, is Leng Beng’s cousin and Sherman’s uncle.
Leng Beng also alleges that Sherman made poor investment decisions in the UK property market that resulted in significant financial loss in 1HFY2023.
CDL’s share price has consistently underperformed peers since Sherman assumed leadership in 2018, which Leng Beng attributes to eroding shareholder confidence and shareholder concerns over strategic mishaps.
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“As a father, firing my son was certainly not an easy decision,” says Leng Beng.
“I accept that business decisions are difficult and young people may make business mistakes in their careers and that is understandable, but circumventing corporate governance laws is a red line,” he adds.
Leng Beng claims that this “scheme” has been deliberately designed to consolidate unchecked authority over CDL by dismantling the existing NC and replacing it with a Nominating and Remuneration Committee (NRC).
This restructuring is seen as a calculated effort to sideline independent oversight and give the majority bloc unrestricted control over CDL’s leadership and decision-making.
In the event the majority bloc is successful, they will be able to elect key management personnel (KMP) at their discretion, bypassing independent oversight; appoint and remove board members arbitrarily; and strip the chairman of meaningful authority, keeping him away from the nomination process of directors and KMPs.
Leadership tussle
Leng Beng iterates that internal measures are already in place to ensure business stability in the absence of a CEO.
In place of Sherman, Kwek Eik Sheng, the incumbent CDL COO who is Leng Beng’s nephew and Sherman’s cousin, will serve as interim CEO.
CDL, addressing the trading halt, says that Sherman remains as the group’s CEO and that CDL’s business operations remain fully functional and unaffected.
In his response, Sherman says 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”.
He added that this issue has “never been about ousting our esteemed chairman”.
“These steps to strengthen our board have purely been to ensure CDL has the highest standards of governance to which it has become known, and our 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 adds.
Simmering down
Interestingly, after the drama that sent Singapore’s business community into a tizzy, Leng Beng, in a near-midnight follow-up statement on Feb 26, suggested that things are not escalating — at least for now.
According to his statement, the “serious lapses” of corporate governance at CDL have been halted. A court hearing earlier in the day resulted in the two new “hastily appointed” directors — Jennifer Duong Young and Wong Su Yen — having undertaken not to exercise any powers as directors until further notice of the court.
Leng Beng added that Sherman, Lee, Wong Ai Ai and the remaining directors acting in concert with them have also undertaken not to “take any further actions regarding their attempted changes to the board committees and management of certain CDL’s subsidiaries, until further notice of [the] court”.
The “irregularly constituted” NRC has also been suspended from taking further action.
With this, CDL’s board committees and the management of the relevant subsidiaries are “now safe” from “further attempts to destabilise, dismantle and reconstitute them”, says Leng Beng.
He adds that the board and the management of these subsidiaries will now be able to function normally and without unwarranted interference as they were prior to the “attempted coup”.
“I must stress that strong corporate governance is the foundation of a well-functioning and sustainable business. It ensures transparency, accountability, and responsible decision-making, which are critical to maintaining investor confidence and protecting the long-term interests of our shareholders,” says Leng Beng.
Chain of events (2025)
Jan 28
CDL’s corporate secretary sent out an email at 8.11pm to the board with Philip Lee and Wong Ai Ai nominating two additional independent directors — Wong Su Yen and Young Jennifer Duong. The Nomination Committee (NC) chairman, Chong Yoon Cho, was unaware of the nominations and is said in the statement to “strongly object” to bypassing the pre-scheduled NC meeting on Feb 20, which was intended to ensure a proper review process of any proposed new independent director.
Jan 31
Philip Lee requisitioned a board meeting.
Feb 5
The board received legal advice, which clearly stated that “it does not appear that the NC, which was set up to comply with the Principle [of the Code], has been given the opportunity to discharge its duties and make the recommendations to the board on the appointment of new directors. By placing the proposal for the nomination of new directors before the board without prior consideration by the NC, the Board would not have the benefit of the deliberations or recommendations of the NC (including any relevant information and assessment on the nominee’s background, potential conflict of interest, and independence)......Any director who does not comply with the code and convenes a meeting of directors to deliberate on the appointment of new directors may cause the company to not be in compliance with the code”.
The board was also advised that “given the profile and standing of CDL, the board should consider the reputational implications and queries or speculation that are likely to be raised in the event of such disclosure [of why in this instance the NC was bypassed]”.
Feb 7
The board meeting was held, and no vote was taken.
Later that night, a Directors’ Resolution in Writing (DRIW) for the appointment of two new directors was circulated and approved within hours without having gone through the typical NC process that CDL has always adhered to over the years.
Feb 8
Kwek Leng Beng sent out an email to seek Sherman Kwek’s dismissal from the position of group CEO.
Feb 9
The reconstituted board, led by Philip Lee, objected to Kwek Leng Beng’s attempt to dismiss Sherman Kwek.
Feb 25
CDL, Kwek Leng Beng, along with board members Philip Yeo, Colin Ong and Chong Yoon Chou, filed a court order against Philip Lee, Sherman Kwek, Wong Ai Ai, Desbaillets Daniel Marie Ghislain, Carolina Chan, Wong Su Yen and Young Jennifer Duong.
Feb 26
CDL released FY2024 results, then issued a trading halt and cancelled the results briefing.
Statements from Kwek Leng Beng, Sherman Kwek and CDL were released.
A court hearing occurred. Later that night, Kwek Leng Beng issued another statement saying the two new directors — Jennifer Duong Young and Wong Su Yen, who were “irregularly and hastily appointed” on Feb 7 — have undertaken not to exercise any powers as directors until further notice of the court.
Feb 27
Sherman released a statement in the evening alleging that Leng Beng's statements "do not present the full picture".
He stated that the majority directors did not have the opportunity to present their case and voluntarily offered undertakings.
Sherman said that Leng Beng failed to mention that all the directors, including himself and the minority directors were directed by the court to refrain from doing anything in relation to CDL’s subsidiaries.
Furthermore, he reiterated that there was no attempt to oust his father. However, the primary reason for the dispute is due to Dr Catherine Wu, an advisor to the board of Millenium & Copthorne (M&C), a subsidiary of CDL.
