After an explosive saga revealed internal rifts between two factions in the City Developments Limited (CDL) boardroom earlier this year, the developer's 62nd annual general meeting (AGM) on April 23 was meant to assuage shareholders, who had seen the value of their holdings plummet to a 16-year low in March.
Instead, non-executive director Philip Yeo spoke out against three existing directors - lead independent director Philip Lee, independent non-executive director Daniel Desbaillets and independent non-executive director Wong Ai Ai - for "pushing the agenda" to appoint Wong Su Yen and Jennifer Duong Young as independent non-executive directors without the board's unanimous approval.
Yeo, a former civil servant who had served as chairman of the Economic Development Board, lashed out at his fellow directors in front of some 450 attendees of the hybrid AGM, claiming they had bypassed CDL chairman Kwek Leng Beng.
"It must be unanimous; it must be [a] consensus. It should not be... disregarding the chairman," said Yeo, who was appointed in May 2009. "There's no company I have been involved [in], overseas and locally, where directors can overthrow... in a coup against [the] chairman. All directors are appointed unanimously. It should not be a small group pushing for this."
Yeo's fiery retort, which was met with applause by some shareholders, corroborates Leng Beng's statement from Feb 26, a day after he issued court papers against his son Sherman Kwek, who is CEO of CDL, and board members of his faction.
The elder Kwek's statement had read: "Contrary to established corporate governance principles, the SGX Listing Rules and the Code of Corporate Governance, they bypassed the Nomination Committee (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."
The elder Kwek had been backed by Yeo, nomination committee chairman Chong Yoon Chou and independent non-executive director Colin Ong before father and son stopped legal action a fortnight later on March 12.
Chong, who was seated next to Yeo at the AGM, acknowledged that the proposed appointment of the two directors "was handled in a rushed manner" and came during the Lunar New Year period. Chong added that he "was given one week" to consider the board appointments - without explaining the deadline - and his father had taken ill in Kuala Lumpur a day before he had been scheduled to interview both candidates.
Young, one of the two newly-appointed directors, said she had been asked to meet the nomination committee and the board "on separate occasions". Over Zoom video calls, she first met two nomination committee members, then two board members, but Chong "had to be called away to KL", said Young.
CDL's corporate governance report, released earlier this month - some weeks after the saga - admitted that the two new directors were voted in by a majority of its then-nine-member board "without the usual process of prior review and recommendation" by the board's then-nominating committee.
However, the board defended the actions as "necessary and appropriate", claiming there were "governance concerns in relation to the role and involvement" of an adviser at CDL's hotel subsidiary Millennium & Copthorne (M&C).
That adviser had been revealed as Catherine Wu, who had worked closely with the elder Kwek for years. Sherman alleged in a Feb 27 statement: "Although her official position is adviser to the board of M&C, a wholly owned and principal subsidiary of CDL Group, she has been interfering in matters going well beyond her scope, and she wields and exercises enormous influence. These matters have troubled us as directors."
Wu resigned from her role as an "unpaid independent adviser" on March 4 after holding the post since August 2024. Before that, Wu was a board director at M&C between June 2022 and January 2024.
Former SID chair Wong speaks up
Wong Su Yen, the other newly-appointed board director, faced more flak for her involvement in the saga as she was a former chairperson of the Singapore Institute of Directors (SID). Between 2020 and 2023, Wong led the "apex organisation for corporate governance in Singapore", as described on her LinkedIn profile, and she was also SID's first female chairperson.
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The same shareholder who had raised earlier questions about the saga pressed Wong for not observing Singapore's code of corporate governance.
In response, Wong said "everything that the nominating committee did was actually abiding by the Companies Act, also by the Singapore Exchange listing rules and also the company's constitution". "We did, in fact, meet nominating committee members, and in fact, we've also met with the board... As Mr Chong has said, there were attempts for us to meet as well."
However, Wong questioned "process versus principle, or form versus substance", launching into an analogy of a sick child who had been bitten by a venomous snake and needed urgent medical attention.
"A stranger takes the child to the hospital. Now, the hospital has procedures in place, which is that the parent needs to sign off before a procedure can be done on the child - very reasonable, and the hospital has a 'comply or explain' principle," said Wong.
"Now, the attending doctor has to make a decision: Do I do this procedure on this child because the venom is going through the child's body? Or do I wait until I can find the parent who can sign off on this because that's [the] procedure?" she added, alluding to Sherman's plan to remove Wu from her post.
Wong's colourful tale, however, was mocked by the shareholder. "She draws the analogy of a child needing immediate medical attention, but she is the child that needs to be attended to."
Wong clarified: "I ask that you take the position as an attending physician."
The shareholder quickly retorted: "But you're not the attending physician. The attending physician, in your analogy, is really the NC, right? You are the child who has been bitten by the snake."
All five of CDL's independent directors who were up for re-election were reappointed on April 23.
CDL shares closed 6 cents higher, or 1.24% up, at $4.90 on April 23. The counter, which had reached a 52-week high of $6.15 a year ago, has slid 4.3% year to date.
Photos: CDL
Read more about what happened at CDL's 62nd AGM:
- CDL 'would like to explore' UK REIT IPO again: CEO Sherman Kwek
- CDL to divest assets worth at least $600 mil to lower 'very high' gearing: CEO Sherman Kwek
- 'Opportune time' for CDL to relook at share buybacks after price at '70% discount to true value': CEO Sherman Kwek
See also:
- CDL says board changes deviated from norms (April 8)
- 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)
