SINGAPORE: Dr Catherine Wu, who City Developments Limited (CDL) group chief executive Sherman Kwek called the “primary reason for the dispute” in the company’s boardroom battle, has stepped down as an unpaid independent adviser to Millennium & Copthorne Hotels (M&C), the hotel arm of CDL, as reported by The Straits Times.
In a statement on March 4, CDL executive chairman Kwek Leng Beng announced that M&C received Dr Wu’s “irrevocable resignation” with immediate effect.
He said that his son and his team of directors no longer have any continuing basis to make “corporate governance allegations” against the company and “justify his board coup.”
He also stressed that breaches of corporate governance committed by his son and his team, including breaches of SGX listing rules and the Code of Corporate Governance, “will never happen again.”
Tensions in the boardroom reportedly surfaced after the property giant posted a 37 per cent drop in its 2024 net profit to S$201.3 million on Feb 26.
It escalated when the older Mr Kwek filed court papers against his son and a group of directors over an alleged “attempted coup” after appointing two new directors without proper vetting by the nomination committee.
Following a closed-door court hearing on Feb 26, the older Mr Kwek said serious corporate governance lapses at CDL and its subsidiaries had been halted.
He also proposed removing his son as CEO to prioritise shareholders’ interests, naming his nephew, COO Kwek Eik Sheng, as interim CEO until a professional CEO is found to lead the company.
In response, the younger Mr Kwek denied any attempt to oust his father, the chairman, and instead pointed to his adviser, Dr Catherine Wu, as the source of the dispute, noting her “influence” in matters beyond her role, which has troubled directors.
In his March 4 statement, the older Mr Kwek shifted the focus to CDL’s financial setbacks, which the company needs to address.
These include CDL’s S$1.9 billion loss in 2020 on the Sincere Property Group investment, poor investment choices in the UK property market that led to significant losses, a 94 per cent profit drop in the first half of 2023, and CDL’s weak share price since his son became CEO in 2018.
This, he said, reflected falling investor confidence and growing shareholder concerns.
On Monday, March 3, trading of CDL shares resumed after a trading halt amid the company’s boardroom brawl. The company’s shares fell 7 per cent, dropping S$0.36 to S$4.76 at the market open, its lowest level since 2009. By 9:07, the stock was down 5.5 per cent at S$4.84, with 3.3 million shares traded. /TISG