SINGAPORE: On Feb 27, City Developments Limited (CDL) group chief executive Sherman Kwek, son of billionaire Kwek Leng Beng, claimed that the cause of the company’s boardroom brawl was his father’s adviser, Dr Catherine Wu.
The younger Mr Kwek said there has been no attempt to oust the chairman, his father. Instead, he said, “The primary reason for the dispute relates to a very serious issue of corporate governance within the CDL group arising from the conduct of one Dr Catherine Wu,” as reported by The Straits Times.
Dr Wu was a director at Millennium & Copthorne Hotels (M&C), the hotel arm of the older Mr Kwek’s business until January 2024. She also worked as the older Mr Kwek’s personal assistant but was not officially employed. Instead, she was paid directly by him, according to a 2018 employment tribunal document from London. In August last year, she rejoined M&C’s board as an adviser.
Mr Kwek said that while Dr Wu is officially an adviser to the M&C board, a key subsidiary of CDL Group, she has been involved in matters beyond her role and holds significant influence—an issue that troubled directors, he added. He said that because of her long-standing relationship with his father, attempts to address the situation were done “sensitively, but to no avail”.
Mr Kwek’s group is pushing for a resolution to end Dr Wu’s advisory role with M&C’s board and another to affirm that she has no power and authority to influence or advise CDL and M&C’s directors, management, or staff. He said these steps were necessary to protect shareholders and employees and to restore proper governance and accountability. On Feb 21, the resolutions were passed by the majority of the board.
On Feb 25, an application for the injunctions was filed. Mr Kwek said the minority directors requested the court to hear the case on its merits urgently but failed in their attempt to have the resolutions overturned.
On Feb 26, CDL’s minority directors, including his father, Mr Philip Yeo, Mr Colin Ong, and Mr Chong Yoon Chou, served court papers to him and four others shortly after noon. The hearing was held just 2½ hours later. Mr Kwek said there was little time to respond.
After a closed-door High Court hearing, the older Mr Kwek said newly appointed directors Jennifer Duong Young and Wong Su-Yen agreed not to use their powers until further court notice. He also said that corporate governance lapses at CDL and its subsidiaries had been halted.
However, the younger Mr Kwek argued that the majority directors did not get a chance to present their case.
He noted, “We voluntarily offered undertakings, as defendants often do in such urgent applications, to preserve the status quo until a full hearing where we would have that opportunity.” He added that despite the minority directors’ attempt to “ambush us”, they failed to get the court to rule on the merits and were instead given directions, leaving them unable to use CDL’s name at the hearing.
In response, the older Mr Kwek responded with a not-so-easy decision to fire his son, the younger Mr Kwek, to “prioritise the interests of all shareholders, not just those of family”.
CDL temporarily suspended trading though business operations remained fully functional and unaffected.
The public fallout of the multi-billion dollar family business has led DBS Group Research to cut its target price for CDL to S$6.70, down from S$10.50. UOB Kay Hian also downgraded the stock to a “hold” with a target price of S$4.60, while HSBC kept a “hold” rating.
Meanwhile, JP Morgan downgraded CDL to “neutral” with a S$4.85 price target, while Morgan Stanley maintained its “underweight” rating at S$5. /TISG