by World FinanceJLL ranks in Fortune’s 2018 ‘World’s Most Admired Companies’ list
The power struggle within City Developments Limited (CDL) has resulted in the cancellation of the company’s FY2024 results briefing and a trading halt on the morning of Feb 26. The battle is between executive chairman Kwek Leng Beng and his son, CEO Sherman Kwek.
In a statement, Kwek Leng Beng expressed his disappointment with his son and a group of directors, including Philip Lee and Wong Ai Ai, for attempting to gain control of the board and the company. He accused them of disregarding corporate governance principles, SGX Listing Rules, and the Code of Corporate Governance by bypassing the Nomination Committee (NC) twice to change the board’s composition. This was quickly followed by significant changes to board committees and the company’s governance.
Kwek Leng Beng has taken legal action to address what he calls an “attempted coup” and to restore corporate integrity. He also stated that there are plans to replace Sherman as CEO at a suitable time. The elder Kwek also emphasized that they will explore all legal options to protect the interests of CDL and its shareholders.
In the meantime, CDL has internal measures in place to ensure business stability in the absence of a CEO. In the event that Sherman is removed, the current COO Kwek Eik Sheng will serve as the interim CEO while the company searches for a professional CEO to lead CDL.
The elder Kwek had previously attempted to dismiss his son on Feb 8, stating that his actions in consolidating power through the appointment of two new directors was just one of many missteps. However, the reconstituted board, led by Philip Lee, opposed this decision on Feb 9.
Kwek Leng Beng also highlighted that under Sherman’s leadership, CDL suffered a staggering $1.9 billion loss in FY2020 due to the Sincere Property debacle. Poor investment decisions in the UK property market also resulted in significant financial losses, leading to a 94% decline in profits in the first half of FY2023. He also pointed out that CDL’s share price has consistently underperformed peers since Sherman became CEO in 2018, reflecting a loss in investor confidence and concerns among shareholders over strategic mistakes.
“As a father, it was not an easy decision to dismiss my son. I understand that making business decisions can be challenging, and young entrepreneurs may make mistakes. However, disregarding corporate governance laws is unacceptable. As the executive chairman, my responsibility is to CDL, its shareholders, and its future. I have always prioritized the interests of all shareholders, not just those of my family. The stakes are too high to allow rash attempts to gain power to destabilize the company,” Kwek Leng Beng stated.
In other news, CDL has divested assets worth over $600 million in FY2024, and its patmi was down by 36.6% year-on-year. The company’s gearing also rose to 117%. has reached out to CDL for comments on the matter.
In related news, a consortium of major developers has bid for the master developer site in Jurong Lake District, and CDL has spent GBP88 million on Yardhouse in the UK to enhance its private rented sector portfolio. Additionally, CDL has been ranked as the world’s most sustainable real estate company by World Finance and has been included in Fortune’s 2018 ‘World’s Most Admired Companies’ list by JLL.