Singapore (AFP) – A high-stakes father-and-son feud has plunged Singapore property giant City Developments Ltd (CDL) into turmoil, with the private boardroom dispute of one of the city-state’s wealthiest families erupting into public view this week. The battle of words between CDL’s executive chairman Kwek Leng Beng and his son Sherman Kwek has exposed deep rifts within the Forbes-ranked fourth-richest family in Singapore. Laced with allegations of corporate missteps, governance breaches, and personal entanglements, the fight threatens to escalate into a bruising court battle over control for a slice of the multibillion-dollar real estate empire.
The first public sign of trouble came Wednesday, when CDL — a component of Singapore Exchange’s benchmark Straits Times Index — abruptly called for a trading halt, followed by a statement cancelling its scheduled financial year 2024 results briefing. Then came the bombshell: The 84-year-old patriarch publicly accused his son and CDL’s chief executive of orchestrating an “attempted coup at the board level”. The younger Kwek, along with the majority of the board, had appointed two additional directors to “consolidate control of the Board” and CDL, he said. To block the alleged power grab, Kwek Leng Beng filed a lawsuit and later announced he had secured a court order to halt the changes to the CDL Group’s board and management.
Sherman Kwek, 49, a Boston University graduate, denied the allegations, saying “there has been no attempt by us to oust the chairman”. Calling his father’s move an “ambush”, he instead pointed to a deeper source of tension — Catherine Wu, a board adviser to a CDL subsidiary, whom his son accused of interfering in the company’s affairs. “She has been interfering in matters going well beyond her scope, and she wields and exercises enormous influence. These matters have troubled us as directors,” Sherman Kwek said. “Due to her long relationship with the Chairman, efforts that were made to manage the situation were done sensitively, but to no avail.”
The dispute has exposed a power struggle within CDL — Singapore’s largest real estate company by market capitalisation — and the Kwek family, whose empire is worth $11.5 billion according to Forbes. In early February, Kwek Leng Beng had sought Sherman’s dismissal as CEO, saying his latest move came after “a long series of missteps”, citing a massive $1.4 billion loss in a 2020 “debacle”, and poor investment decisions in the UK. CDL’s share price has also “consistently underperformed peers since (Sherman) assumed leadership in 2018”, the patriarch said. “(Young) people may make business mistakes in their careers and that is understandable, but circumventing corporate governance laws is a red line,” Kwek Leng Beng said. “As a father, firing my son was certainly not an easy decision” but the stakes were “simply too high to allow reckless power grabs to destabilise the company,” he said.
Shares of the $3.4 billion firm remain suspended, and CDL has been downgraded by firms including JPMorgan Chase & Co, according to Bloomberg.
CDL started out as a loss-making business when Kwek Leng Beng, his father Kwek Hong Ping, and his brother Kwek Leng Joo bought it in 1971. Under Kwek Leng Beng, it saw a massive expansion, with its portfolio today spanning residences, offices, hotels, retail malls, and integrated developments in Singapore, as well as China, Japan, the United States, and across Europe. Its move into hospitality turned subsidiary Millennium & Copthorne Hotels into the finance hub’s largest international hotel group, with assets that include The Biltmore hotel in London’s Mayfair and Millennium properties in New York’s Wall Street and Times Square.
The elder Kwek said preserving his legacy was among the reasons why he was fighting his son and his boardroom allies. “The reckless actions of a faction seeking to consolidate unchecked control not only undermine the foundations of CDL’s governance but also put at risk the very legacy we have built over the decades,” Kwek Leng Beng said. With the courts now involved and CDL’s leadership in question, this bitter family dispute is far from over. Sherman Kwek has defended his move to get Catherine Wu off the Millennium & Copthorne board as “necessary” for CDL’s interest, adding that the majority directors will “continue to uphold corporate governance and accountability”. His father — who made no mention of Wu in his response — asserted that “stripping away any meaningful authority of the Executive Chairman is a coup”. “It is now a matter before the court and I will let the court decide. Justice always prevails,” Kwek Leng Beng said.
© 2024 AFP
