Father-Son Spat Has Wreaked Damage, Restoring Investor Confidence Will be an Uphill Task
A Sigh of Relief for CDL Shareholders
Shareholders of City Developments Ltd (CDL) probably heaved a huge sigh of relief over the announcement late on Wednesday (Mar 12) that Kwek Leng Beng had dropped his lawsuit against his son Sherman Kwek and six other members of the CDL board.
CDL’s Share Price Rallies
CDL’s share price rallied immediately following this announcement. However, are the group’s troubles over?
A Strategic Review Needed
Shareholders might wonder if the father-son duo can work harmoniously after their high-profile spat. More crucially, CDL’s board of directors should urgently launch a strategic review to improve the group’s performance.
No Changes to the Board or Management Structure
According to Wednesday’s announcement, Kwek Leng Beng and Sherman Kwek will continue as executive chairman and group chief executive officer, respectively. Also, all the current directors, including Jennifer Duong Young and Wong Su-Yen, remain on the board.
The Ugly Saga Behind the Scenes
The announcement appears to bring closure to an ugly saga at the property and hotel group. Kwek Leng Beng wanted to remove Sherman Kwek as CEO citing governance issues. Sherman Kwek and the majority of the board countered that they were concerned over the conduct of Dr Catherine Wu who has a "long relationship with the chairman".
Conclusion
While the announcement may bring relief to CDL’s shareholders, restoring investor confidence will be an uphill task. The father-son spat has left a lasting impression, and it remains to be seen if the duo can work harmoniously to steer the company forward. A strategic review is necessary to address the group’s performance and restore investor confidence.
Frequently Asked Questions
Q: What does the announcement mean for CDL’s share price?
A: The announcement has led to an immediate rally in CDL’s share price.
Q: What changes are being made to the board or management structure?
A: Kwek Leng Beng and Sherman Kwek will continue as executive chairman and group chief executive officer, respectively, and all current directors remain on the board.
Q: What is the status of the lawsuit?
A: Kwek Leng Beng has dropped his lawsuit against his son Sherman Kwek and six other members of the CDL board.
