for contribution to Iskandar Puteri
City Developments (CDL) executive chairman Kwek Leng Beng has announced that the “serious corporate governance issues” that have plagued the company have stopped. In a second statement released by CDL, Kwek stated that after a court hearing on February 26th, two new directors that were appointed on February 7th, Jennifer Duong Young and Wong Su Yen, have agreed to not exercise any powers as directors until further notice from the court. Kwek’s son, Sherman Kwek, Philip Lee, Wong Ai Ai, and the other directors acting in concert with them, have also agreed to not take any further actions regarding their attempted changes to the board committees and management of CDL’s subsidiaries until further notice from the court. The nominating and remuneration committee, which was irregularly constituted, has also been suspended from taking any further action.
Kwek stresses the importance of strong corporate governance, stating that it ensures transparency, accountability, and responsible decision-making, which are critical to maintaining investor confidence and protecting the long-term interests of shareholders. CDL shocked the markets on the morning of February 26th by calling for a trading halt and last-minute cancellation of its FY2024 results briefing, citing a disagreement within the board. However, Kwek accused his son, Lee, Wong, and a group of directors acting with them of trying to consolidate control of the board and the group. He filed court papers on February 25th to “set things right”, stating that it is necessary to deal with the attempted coup.
Kwek adds that the business operations of CDL remain unaffected, and Sherman Kwek will remain the group’s CEO until there is a board resolution to change leadership. In his first statement, Kwek stated that they intend to change the CEO at the appropriate time and will explore all legal options available to vigorously defend and protect the interests of CDL and its shareholders. In the event that Sherman is removed as CEO, the incumbent COO, Kwek Eik Sheng, will serve as interim CEO. CDL’s shares last traded at $5.12 before the trading halt on the morning of February 26th.