SINGAPORE: City Developments Ltd (CDL) shares rose on Thursday (March 13) after executive chairman Kwek Leng Beng announced he would drop his lawsuit against his son Sherman Kwek, CDL’s group chief executive officer, and six other board members.
According to The Business Times, CDL’s stock climbed 4 per cent at market open, gaining S$0.20 to S$5.14 at 9.05 am, with 798,500 shares traded. It later eased slightly to S$5.10, up 3.2 per cent or S$0.16, at 9.51 am.
When the market closed for the day, CDL was at S$5.09, according to The Edge Singapore.
On Wednesday, the older Mr Kwek said, “I will continue in my role as executive chairman and Sherman Kwek will continue as group chief executive officer,” adding that all current directors, including Jennifer Duong Young and Wong Su-Yen, will stay on the CDL board.”
He said the board members have agreed to put aside their differences for the greater good of CDL and its stakeholders.
The older Mr Kwek also said that the company will “now and in the future” focus on “strengthening CDL’s business” in accordance with good corporate governance.
He added that CDL will continue working on major developments in Singapore and globally, expanding the Millennium & Copthorne (M&C) brands, and pushing forward its capital recycling efforts, with priority given to maximising shareholder value.
On Feb 26, the older Mr Kwek took legal action against his son, as well as board members Philip Lee Jee Cheng, Wong Ai Ai, and other directors over an alleged “attempted coup”, and proposed removing him as group CEO to “prioritise the interests of all shareholders”.
The dispute quickly rattled the market, causing CDL’s shares to drop 7 per cent when trading resumed on March 3.
The younger Mr Kwek, however, dismissed claims of a coup, pointing to his father’s longtime adviser, Dr Catherine Wu, as the source of the dispute and claiming there has been no attempt to oust the chairman.
On March 4, the older Mr Kwek announced Dr Wu’s “irrevocable resignation” as an “unpaid independent adviser” to M&C, CDL’s hotel arm, leaving his son no basis to “justify his board coup”.
As tensions between father and son played out, investors grew concerned about the company’s performance.
The Securities Investors Association (Singapore) (SIAS) called on CDL to clarify several issues, including Dr Wu’s role as a director at M&C and how the company planned to reassure shareholders that the board remains effective and united in its business strategy. /TISG