SINGAPORE: A family feud at one of Singapore's biggest property companies has escalated into a legal battle, with City Developments Limited (CDL) Executive Chairman Kwek Leng Beng taking his son, group CEO Sherman Kwek, to court over alleged governance lapses and an attempted power grab at the board level.
In a statement issued on Wednesday (Feb 26), the senior Kwek accused his son and a group of directors, including Philip Lee and Wong Ai Ai, of bypassing CDL's Nomination Committee to push through board changes without proper review. He said court papers were filed on Tuesday to address what he described as an attempted "coup" and to restore corporate integrity.
The dispute centres on events that began on Jan 28, when an email was sent to the board nominating two new independent directors. The timing, on the eve of Chinese New Year, and the rush to approve the appointments raised concerns, said Mr Kwek Leng Beng.
Mr Chong Yoon Chou, the chairman of the Nomination Committee, was "completely unaware" of the nominations, said the older Kwek.
"On Jan 29, 2025, I questioned the urgency of appointing an additional two new directors, emphasising that such significant governance decisions should not be rushed without due diligence and proper vetting," he wrote.
Despite objections, a board meeting was convened on Feb 7. No vote was taken, but hours later, a written resolution approving the appointments was passed, said Mr Kwek Leng Beng.
The move, according to Mr Kwek, indicated a pre-planned effort by his son and other directors to consolidate control.
Tensions escalated further when Mr Kwek sought his son Sherman Kwek’s removal as group CEO on Feb 8, citing his role in what he called a series of governance failures. The board, now led by Philip Lee, opposed the move.
The elder Kwek pointed to past business missteps under Mr Sherman Kwek's leadership, including a S$1.9 billion loss from CDL's investment in Chinese developer Sincere Property in 2020 and poor returns from UK property ventures. CDL's share price has also underperformed since Sherman Kwek took over in 2018, he said.
"As a father, firing my son was certainly not an easy decision," said Mr Kwek.
"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."
Mr Kwek Leng Beng, who has led CDL for over 50 years, vowed to take all legal steps necessary to protect the company’s governance standards and its shareholders' interests.
If the legal action by the elder Kwek is successful, Mr Kwek Eik Sheng, currently group chief operating officer, will serve as interim group CEO should Mr Sherman Kwek be removed.
He urged shareholders to support efforts to "restore strong governance" at CDL, warning that the current dispute risks damaging the company’s reputation and long-term stability.
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In a statement issued on Wednesday (Feb 26), the senior Kwek accused his son and a group of directors, including Philip Lee and Wong Ai Ai, of bypassing CDL's Nomination Committee to push through board changes without proper review. He said court papers were filed on Tuesday to address what he described as an attempted "coup" and to restore corporate integrity.
The dispute centres on events that began on Jan 28, when an email was sent to the board nominating two new independent directors. The timing, on the eve of Chinese New Year, and the rush to approve the appointments raised concerns, said Mr Kwek Leng Beng.
Mr Chong Yoon Chou, the chairman of the Nomination Committee, was "completely unaware" of the nominations, said the older Kwek.
"On Jan 29, 2025, I questioned the urgency of appointing an additional two new directors, emphasising that such significant governance decisions should not be rushed without due diligence and proper vetting," he wrote.
Despite objections, a board meeting was convened on Feb 7. No vote was taken, but hours later, a written resolution approving the appointments was passed, said Mr Kwek Leng Beng.
The move, according to Mr Kwek, indicated a pre-planned effort by his son and other directors to consolidate control.
Tensions escalated further when Mr Kwek sought his son Sherman Kwek’s removal as group CEO on Feb 8, citing his role in what he called a series of governance failures. The board, now led by Philip Lee, opposed the move.
The elder Kwek pointed to past business missteps under Mr Sherman Kwek's leadership, including a S$1.9 billion loss from CDL's investment in Chinese developer Sincere Property in 2020 and poor returns from UK property ventures. CDL's share price has also underperformed since Sherman Kwek took over in 2018, he said.
"As a father, firing my son was certainly not an easy decision," said Mr Kwek.
"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."
Mr Kwek Leng Beng, who has led CDL for over 50 years, vowed to take all legal steps necessary to protect the company’s governance standards and its shareholders' interests.
If the legal action by the elder Kwek is successful, Mr Kwek Eik Sheng, currently group chief operating officer, will serve as interim group CEO should Mr Sherman Kwek be removed.
He urged shareholders to support efforts to "restore strong governance" at CDL, warning that the current dispute risks damaging the company’s reputation and long-term stability.
Continue reading...