Kwek vs Kwek: CDL court hearing, trading status in spotlight this week

A REAL-LIFE Succession Feud: CDL’s Kwek Family Conflict

A REAL-LIFE succession feud imploded from within property giant City Developments Ltd (CDL) last week, with a father-and-son tussle throwing the Kwek family-controlled group into crisis.

Accusations of a Hostile Bid to Remove Sherman Kwek

Explosive statements from both sides followed over three days, after trading in CDL stock was halted on February 26. Accusations of an "attempted coup" and a hostile bid to remove Sherman Kwek from his group CEO position were parried by jaw-dropping revelations of "troubling matters" involving the "enormous influence" wielded by Catherine Wu, long-time adviser to patriarch Kwek Leng Beng.

The Conflict Moves into the Singapore Supreme Court

All eyes are on CDL shares, which are expected to resume trading on March 3, with corporate governance under scrutiny and business stability and succession now at stake. Kwek senior, who is executive chairman, has said CDL should appoint a professional CEO. Meanwhile, CDL has said that Sherman Kwek remains the group CEO, until there is a board resolution to change the company leadership. The conflict moves into the Singapore Supreme Court on March 4, when a closed-door case conference will be heard.

The Story So Far

Here’s a summary of the story so far:

• On February 26, bombshell news emerged that CDL executive chairman Kwek Leng Beng had filed a court action to deal with an "attempted coup" by Sherman Kwek, Philip Lee, Wong Ai Ai, and directors acting with them.
• The elder Kwek wanted to remove his son Sherman Kwek as CDL’s group chief executive officer due to "serious lapses of corporate governance" laws.
• He objected to the appointment of the two new independent directors, Jennifer Duong Young and Wong Su-Yen, who were "irregularly and hastily appointed" earlier that month without going through the proper process via a nomination committee.
• Kwek Leng Beng also pointed to missteps under his son’s leadership, including a S$1.9 billion loss from CDL’s investment in Chinese developer Sincere Property in 2020 and poor investment decisions in the UK property market.

The Feud: A Family Affair

The feud is a family affair, with Sherman Kwek accusing his father of making "inaccurate" statements and trying to block the appointments of the two new independent directors. In a statement, Sherman Kwek said that the recent board changes were not about ousting Kwek Leng Beng – instead, it was related to "a very serious issue of corporate governance" involving Dr. Catherine Wu, who has a "long relationship with the chairman".

Conclusion

The CDL succession feud is a complex and contentious issue, with both sides accusing each other of malfeasance. The company’s future hangs in the balance, with some analysts rerating its stock amid the uncertainty. As the conflict moves into the Singapore Supreme Court, one thing is clear: only time will tell how this family feud will ultimately play out.

FAQs

Q: What is the nature of the conflict between CDL’s Kwek family members?
A: The conflict is a succession feud between CDL’s executive chairman Kwek Leng Beng and his son, Sherman Kwek, who is the group’s CEO.

Q: What are the key issues at stake?
A: The issues at stake include the appointment of new independent directors, corporate governance, and the influence of Catherine Wu, a long-time adviser to Kwek Leng Beng.

Q: What is the current state of the conflict?
A: The conflict is ongoing, with both sides accusing each other of malfeasance, and the company’s future hanging in the balance.

Q: What is the expected outcome?
A: The outcome is uncertain, with some analysts rerating CDL’s stock amid the uncertainty.