SINGAPORE: A City Developments Ltd. (CDL) senior director’s criticism of how new board members were appointed has put the spotlight back on CDL’s boardroom dispute on Wednesday, according to Bloomberg.
At CDL’s latest annual general meeting, board member Philip Yeo denounced the rushed appointment of two new directors earlier this year, which set off the rift between executive chairman Kwek Leng Beng and his son, group CEO Sherman Kwek, in February.
Bloomberg reported that Mr Yeo, a member of the board, said the board ignored proper procedures and that decisions went against the company’s founding family.
CDL shareholder Gary Saw, who attended the event, described the meeting as “quite a disaster”, noting it showed a real division among the management, board, and interests of minority shareholders.
The boardroom dispute in February briefly led to legal action, with the older Mr Kwek filing court papers against his son and the younger Mr Kwek pointing to his father’s long-time adviser, Dr Catherine Wu, as the source of the dispute.
After the feud between father and son affected CDL shares and prompted the Securities Investors Association (Singapore) (SIAS) to seek clarity on how the company plans to protect shareholder value amid its performance, the older Mr Kwek dropped the lawsuit against his son in March.
While CDL has taken “responsibility” in ensuring shareholders that it will provide them a proper account, concerns have still not gone away.
The younger Mr Kwek acknowledged that the boardroom brawl has weighed on CDL’s share price and investor confidence. Profits fell 37% last year, while the company’s heavy debt load remains a concern for shareholders.
Despite the tensions, shareholders voted strongly to keep all five independent directors on the board.
It took a toll on the father’s and son’s remuneration for 2024, with the 84-year-old executive chairman receiving 13.6% less than the previous year, at S$5.97 million, while his son took a 15.4% pay cut, earning S$2.97 million, from S$3.52 million a year earlier.
In addition, it sparked calls for tighter rules on family-owned businesses, with analysts urging regulators to require family-owned companies in the city-state to disclose governance frameworks to help prevent future succession conflicts.
Malay Mail reported that the younger Mr Kwek said this year’s divestments could exceed the S$600 million in asset sales in 2024. He also hinted CDL may revisit plans to list its UK assets once markets stabilise. /TISG