The board of City Developments Limited (CDL), the property company controlled by one of Singapore’s wealthiest families, said it deviated from its usual processes earlier this year in appointing two new directors.
But it defended the actions as “necessary and appropriate”, due to what it said were “governance concerns in relation to the role and involvement” of an adviser at its hotel subsidiary.
The developer released its 2024 annual report on Tuesday, weeks after its executive chairman Kwek Leng Beng withdrew a lawsuit against his son, CDL’s CEO Sherman Kwek and several other directors.
The elder Kwek had previously opposed the board changes and accused his son of orchestrating a boardroom coup. They have since agreed to set aside their differences.
The adviser the board had concerns about is Catherine Wu, who Sherman and some other CDL directors had accused of being the source of the recent feud. Wu, who worked closely with Leng Beng for years, had been an adviser to the board of CDL’s hotel subsidiary Millennium & Copthorne. She resigned from her unpaid role in March.
The annual report’s corporate governance section detailed the events that took place on CDL’s board in the preceding months. The appointment of two new directors in February — who were voted in by a majority of its then nine-member board — took place “without the usual process of prior review and recommendation” by the board’s then nominating committee.
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The 84-year-old chairman had been a member of that committee, along with other directors. The report said there was a belief that the committee was unlikely to support the proposed appointments of the two directors. It said Leng Beng had previously nominated a third candidate to join the board, before changing his mind.
After adding the new directors, CDL formed a nominating and remuneration committee that excluded Leng Beng.
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Directors’ re-election
Despite attempts to wrap up the feud publicly, the developer could face scrutiny from shareholders at an annual meeting scheduled for April 23.
The local stock exchange’s regulatory arm has questioned CDL about corporate governance issues and disclosures related to the tussle, Bloomberg News reported this month.
The two new directors — Jennifer Duong Young, who spent 21 years at Credit Suisse, and Wong Su-Yen, a former chair of the Singapore Institute of Directors — are up for re-election at the upcoming meeting, along with three independent directors.
The Kwek family controls about 49% of shares of CDL, with ownership spread among multiple family members.
The outlook has darkened further for the developer, whose shares have fallen more than 60% since Sherman became CEO in 2018. The family feud burst into the open in late February on the same day CDL released its 2024 results, which missed analysts’ estimates.
The stock has slid about 12% this year through Monday’s close, amid a broader global market rout prompted by fears of a global trade war following tariffs pushed by US President Donald Trump.
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Chart: Bloomberg
See also:
- CDL shares close 3% higher after Kwek Leng Beng drops legal action (March 13)
- CDL directors put stop to legal action, executive chairman Kwek Leng Beng and son Sherman Kwek to retain posts (March 12)
- SIAS asks CDL to clarify Dr Catherine Wu’s role at M&C, process of board appointments, and shareholder safeguards (March 6)
- Dr Catherine Wu resigns; CDL CEO can ‘no longer’ make corp governance allegations and justify board coup: Kwek Leng Beng (March 4)
- CDL loses biggest developer spot to UOL as stock slides (March 3)
- CDL shares down more than 5% upon trading resumption (March 3)
- Urgency of court application stems from disruption of CDL’s corporate structure; Phillip Yeo sees saga as distraction (Feb 28)
- Generational shift at City Developments (Feb 27)
- Primary reason behind CDL’s dispute is related to M&C board advisor Dr Catherine Wu, says Sherman Kwek (Feb 27)
- CDL board fight cools with undertaking from two new IDs (Feb 26)
- Father and son battle it out in court for control for CDL (Feb 26)
- Sherman Kwek to remain as group CEO of CDL; finds episode 'incredibly disappointing' (Feb 26)
- CDL calls for trading halt, cancels FY2024 results briefing (Feb 26)
- City Developments' FY2024 patmi falls 36.6% as gearing rises to 117% (Feb 26)
- CDL divests assets worth more than $600 million in 2024 (Jan 16)
