Father And Son Battle It Out Court Control Cdl
CDL secures $500 million green loan from DBS for Republic Plaza redevelopment
A struggle for control over the leadership of City Developments Limited (CDL) between father and executive chairman Kwek Leng Beng and his son, CEO Sherman Kwek, has resulted in the cancellation of the company’s FY2024 results briefing and a halt in trading on the morning of Feb 26.
In a statement released by the elder Kwek, he accuses his son, along with directors Philip Lee and Wong Ai Ai, of attempting to consolidate control of the board and the company. This, according to him, goes against established corporate governance principles, the SGX Listing Rules, and the Code of Corporate Governance. He also claims that they have bypassed the Nomination Committee twice in order to change the board’s composition and quickly followed up by making significant changes to board committees and the company’s governance.
On Feb 25, Kwek filed court papers in an attempt to “set things right”. He believes it is necessary to address this “attempted coup” and restore corporate integrity.
The elder Kwek states, “We intend to replace the CEO at the appropriate time. We will continue to explore all legal options available to us in order to vigorously defend and protect the interests of CDL and its shareholders.”
He also mentions that CDL already has measures in place to ensure business stability in the absence of a CEO. In the event that Sherman is removed, COO Kwek Eik Sheng will serve as the interim CEO, ensuring continuity while the company searches for a professional CEO to lead them moving forward.
This is not the first time the elder Kwek has tried to dismiss his son, having made an attempt on Feb 8. He cites the younger Kwek’s role in bypassing proper governance and consolidating power by appointing two new directors as the latest in a series of missteps.
On Feb 9, the reconstituted board, led by Lee, objected to the chairman’s attempt to dismiss the CEO.
The elder Kwek also argues that under Sherman’s leadership, CDL has faced significant financial losses, including a $1.9 billion loss in FY2020 due to the Sincere Property debacle and poor investment decisions in the UK property market that resulted in a 94% decline in profits in 1HFY2023. He also points out that CDL’s share price has underperformed compared to its peers since his son took over in 2018, reflecting a loss of investor confidence and concerns from shareholders over strategic missteps.
“As a father, it was not an easy decision to fire my son. I understand that making business decisions can be difficult, and mistakes can happen, especially for young people. However, circumventing corporate governance laws is a clear red flag. As chairman, my responsibility is to CDL, its shareholders, and its future. I take my role as executive chairman seriously and have always prioritized the interests of all shareholders, not just my family’s. The stakes are simply too high to allow reckless power grabs to destabilize the company,” says the elder Kwek.
CDL’s FY2024 results showed a 36.6% drop in PATMI from the previous year, and their gearing ratio increased to 117%. has reached out to CDL for comment.
In other news, CDL has divested assets worth more than $600 million in 2024 and also secured a $500 million green loan from DBS for the redevelopment of Republic Plaza. The company has also been ranked as the world’s most sustainable real estate company and spent GBP88 million on Yardhouse in the UK, further expanding their portfolio in the private rental sector. Additionally, a sole consortium of giant developers has bid for the role of master developer for the Jurong Lake District site.
