Urgency of court application stems from disruption of CDL’s corporate structure; Phillip Yeo sees saga as distraction

Samantha Chiew

/ The Edge Singapore

February 28, 2025 12:16 AM SGT

propertyeditor@edgeprop.sg

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Kwek Leng Beng, excutive chairman of CDL (left) and non-Independent non-executive director of CDL, Philip Yeo

In the latest news from the City Developments Limited (CDL) saga involving father and son -- Kwek Leng Beng and Sherman Kwek -- the elder Kwek released a third statement on the night of Feb 28.

“Firstly, I maintain that the integrity and governance of CDL are paramount. The allegations made by Sherman regarding the remarks of the court are misleading,” he says.

Sherman had on Feb 27 released a statement in the evening saying that his father’s previous two statements “did not present the full picture” – he alleges that he, Philip Lee, Wong Ai Ai and a group of directors were not given the opportunity to present their cases and had to voluntarily offer undertakings.

Furthermore, Sherman said he had not attempted to oust the executive chairman. He also alleged that the corporate governance issue stems from the conduct of Dr. Catherine Wu, the director of the board of Millenium & Copthorne (M&C), CDL’s hospitality arm.

In Leng Beng's latest statement, he mentioned that the urgency of the application stemmed from "serious concerns about Sherman and the directors acting with him and "attempting to undermine and disrupt the governance structure of CDL".

The bottom line is that following the court hearing, the two additional independent directors cannot act, and the changes to the board committees and the management of the relevant CDL subsidiaries are frozen, pending any further court order, adds the elder Kwek.

He further highlighted that Sherman and the directors acting with him "provided those undertakings only because they were sued".

“In the past weeks, they bypassed the Nomination Committee (NC) on two occasions in breach of the relevant regulations under the SGX Listing Rules and the Code of Corporate Governance," Leng Beng points out. "This is why we had to make the court application. It was necessary to protect the interests of CDL and its shareholders during this period of significant turmoil.”

He adds: “I take great pride in the fact that CDL was ranked number two in the Singapore Governance and Transparency Index 2024 and has always upheld the highest standards of corporate governance. As chairman, it is my duty to ensure that we continue to do so. Any real or perceived difference of opinion within the Board, regarding external advisers or otherwise, should be resolved within the appropriate corporate governance framework, not by way of a Board coup or directors’ resolutions in writing.”

Finally, while Sherman stated there was no attempt to oust the chairman. He thinks that this “misses the point”, as protecting good governance, including the office of the executive chairman, and not him as an individual, is critical.

“Stripping away any meaningful authority of the executive chairman is a coup. It is now a matter before the court, and I will let the court decide. Justice always prevails,” he says.

'Just another distraction'

Along with the statement released by Leng Beng, non-independent non-executive director of CDL Philip Yeo also weighed in. He views this attempt by Sherman and the group of directors as an attempt to distract everyone from the matter at hand.

“The facts are that the CDL CEO and the directors acting with him circumvented the NC intentionally and pushed through the appointment of two new additional independent directors against legal advice. They quickly reconstituted the NC and the Remuneration Committee as the Nomination & Remuneration Committee to effectively immobilise the executive chairman,” says Yeo.

Yeo adds that Sherman should instead "be focused on making back the $1.9 billion of shareholders’ losses through Sincere Properties and the other losses from the UK property investments".

“Instead, he seems more concerned about grievances, mobilising a group of independent directors to remove an advisor to the CDL hospitality business, which has actually seen profit improvements for the past few years since Covid-19," according to Yeo. "The CDL CEO should work with the whole Board to make money for all CDL shareholders."

Yeo points out that CDL was acquired by Kwek Hong Png, and his sons, Leng Beng and Leng Joo. "I know all three of them well," he says. "The men of our era all dared to dream. That is how the three of them executed so well to build a multi-billion-dollar Singaporean company that competes on a global scale. The CDL CEO must learn from them. Just pure hard work to serve all shareholders!”

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