SIAS seeks clarification from CDL following boardroom brawl—Father proposed to remove son after allegations of attempted coup

SINGAPORE: The Securities Investors Association (Singapore) (SIAS) has urged City Developments Limited (CDL) to provide clarity on Dr Catherine Wu’s role as a director on the board of Millennium & Copthorne Hotels (M&C) and to explain how it plans to protect shareholder value amid concerns over the company’s performance.

According to The Edge Singapore, SIAS made its request following CDL’s boardroom brawl, where executive chairman Kwek Leng Beng proposed to remove his son, group CEO Sherman Kwek, over allegations of an attempted coup.

In response, the younger Mr Kwek claimed his father was being influenced by longtime adviser Dr Catherine Wu. On March 4, the older Mr Kwek announced Dr Wu’s “irrevocable resignation” as an “unpaid independent adviser” to M&C, the hotel arm of CDL.

SIAS has requested CDL to clarify the strategic benefits of its proposed plan to privatise Millennium & Copthorne Hotels New Zealand (MCK) after the company’s recent $2.25 per share offer was rejected by MCK’s directors. It also sought more details on the framework structure in place, particularly the process for nominating, selecting, and appointing directors.

In addition, SIAS has asked CDL to provide clarification on Dr Wu’s appointment, including whether the board approved her role and the reasons behind her departure from the M&C board.

They also want to know if there was a proper selection process for the independent adviser role and what the key duties and expectations were.

The disagreement on Feb 26 largely revolved around two newly appointed directors, Jennifer Duong Young and Wong Su-Yen, who, according to the older Mr Kwek, were nominated without proper vetting.

SIAS has raised concerns about how they were selected, including the process followed for their appointment and the individuals they engaged with before being named to the board.

SIAS said in a released statement, “Given that they are not first-time directors, can the two directors let shareholders know if they had requested to meet the nominating committee as part of a formal and transparent appointment process? Do the two directors believe that their nomination and appointment adhered to best corporate governance practices?”

SIAS has also sought clarification on how CDL plans to reassure shareholders that the board remains effective and united in its business strategy amid the current rift.

It referred to Kwek Eik Sheng’s appointment as group chief operating officer and questioned his reporting structure during this time.

To ensure transparency, it also urged directors to release all statements about the situation on SGXNext first.

CDL has yet to respond to SIAS’ requests. Meanwhile, the ongoing dispute has already shaken investors’ confidence, as CDL shares dropped 7 per cent on Monday (March 3) after the company lifted its trading halt. /TISG