CDL Chairman defends governance amid legal dispute

CDL recently announced a trading halt.

City Developments Limited (CDL) Chairman Kwek Leng Beng defended the company’s governance structure, calling allegations by CEO and son Sherman Kwek misleading and emphasising that legal action was necessary to protect CDL and its shareholders.

Kwek stated that Sherman and the directors acting with him attempted to undermine CDL’s governance by bypassing the Nomination Committee on two occasions, in breach of SGX Listing Rules and the Code of Corporate Governance.

Following the court hearing, two additional independent directors are unable to act, and changes to Board committees and subsidiary management remain frozen pending further court orders.

Philip Yeo, CDL Non-Independent Non-Executive Director, echoed these concerns, calling the situation a distraction from the real issue. He stated that the younger Kwek and his aligned directors deliberately circumvented the Nomination Committee and pushed through the appointment of two independent directors against legal advice. Yeo further alleged that these moves were intended to restructure the Board and limit the Executive Chairman’s authority, instead of focusing on recovering CDL’s $1.9b losses from Sincere Properties and other UK investments.

Kwek reaffirmed CDL’s commitment to corporate governance, highlighting its number-two ranking in the Singapore Governance and Transparency Index 2024. He maintained that Board disputes should be resolved within the proper corporate governance framework, rather than through a Board coup or directors’ resolutions in writing.

Addressing his son’s claim that there was no attempt to oust him, Kwek argued that stripping the Executive Chairman of meaningful authority amounted to a coup.

“It is now a matter before the court, and I will let the court decide. Justice always prevails,” the elder Kwek said.

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