Billionaire Kwek Leng Beng, executive chairman of City Developments Ltd. (CDL) and his son, Sherman, have pledged to uphold the highest standards of corporate governance after a boardroom brawl between the two top executives sent the company’s shares tumbling.
The feud between the father and son became public in late February after Kwek Leng Beng, executive chairman of the company, sued Sherman, group CEO, for control of the Singapore-listed property developer.
In the case filed with the Singapore High Court, the elder Kwek accused Sherman of instigating a boardroom coup by appointing two new board members without proper vetting by the nomination committee. The lawsuit has since been withdrawn and both have agreed to settle their differences.
“The board and the management team will continue to strengthen the group’s business and ensure long-term value creation while upholding the highest standards of governance,” the elder Kwek said in CDL’s latest annual report released on Tuesday. “We remain focused on delivering shareholder value.”
As part of initiatives to boost shareholder value, CDL is seeking shareholders’ approval at the company’s annual general meeting on April 23 to renew is mnadate to buy back up to 10% of its ordinary shares from the market, as well as an additional 10% of its preference shares. Upon completion of the buyback, the Kwek family’s controlling stake (spread aross several members of the clan) would increase to 55.5 per cent from about 49%, the company said in a separate letter to shareholders.
City Developments shares have fallen 12% this year and the company had lost its spot as Singapore’s most valuable publicly traded property company. CDL reported in February a 37% decline in 2024 net profit to S$201.3 million ($150.5 million) from the previous year.
“Our pledge to the highest standards of corporate governance and transparency is the group’s guiding principle as we work to rise above challenges,” Sherman said in the annual report.
The feud had cast the limelight on one of Singapore’s wealthiest families with an estimated net worth of $11.5 billion. It was settled after Catherine Wu, an adviser at the center of the boardroom tussle, resigned.
CDL extensively discussed the feud in its 2024 annual report. While the appointment of two new directors deviated from the company’s usual practice, the board said the actions were “necessary and appropriate” due to the governance concerns in relation to Wu’s role as adviser for City Developments’ hotel arm Millennium & Copthorne.
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