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CDL’s Kwek Leng Beng seeks to fire son Sherman Kwek as CEO over ‘attempted coup’
CDL executive chairman Kwek Leng Beng (left) files court case against son and group CEO Sherman Kwek over 'attempted coup'.PHOTOS: ST FILE, BT FILE
Angela Tan
UPDATED FEB 26, 2025, 01:43 PM
SINGAPORE - A tussle between father and son for control of property giant City Developments Limited (CDL) was revealed on Feb 26, with executive chairman Kwek Leng Beng publicly criticising his son Sherman Kwek, who is CDL’s group chief executive.
The older Kwek said that he has filed court papers to address the “attempted coup” by his son Sherman, 49, board members Philip Lee and Wong Ai Ai as well as a group of directors acting with them to allegedly consolidate control of CDL’s board.
“This is necessary to deal with this attempted coup at the board level and restore corporate integrity,” said Mr Kwek Leng Beng, who will be 84 in 2025.
“We intend to change the chief executive officer at the appropriate time. We will continue to explore all legal options available to us to vigorously defend and protect the interests of CDL and its shareholders,” he said.
The older Kwek claimed that Mr Sherman Kwek’s group had bypassed the nomination committee (NC) on two occasions to change the board composition, and hastily followed up by making significant changes to board committees and CDL’s governance.
This, he said, was contrary to established corporate governance principles, the Singapore Exchange Listing Rules and the Code of Corporate Governance.
The revelations come as the older Kwek detailed a chain of events from January that revealed family infighting over the $4.7 billion Singapore-listed developer which has properties in nearly 30 countries.
Mr Kwek Leng Beng said that on Jan 28, the eve of Chinese New Year, CDL’s corporate secretary sent an email to the board about Mr Lee and Ms Wong nominating two additional independent directors.
On Feb 7, CDL’s board announced the approval of the appointment of Ms Jennifer Duong Young as an independent non-executive director following the resignation of Mr Tan Kian Seng. She spent 21 years at Credit Suisse.
The board also approved the appointment of Ms Wong Su Yen as independent non-executive director. Ms Wong is said to have over 30 years of experience across diverse industries including high-tech, financial services, professional services, education, retail, and the public sector.
The next day, Mr Kwek Leng Beng questioned the urgency of appointing two new directors without proper vetting.
“Additionally, Mr Chong Yoon Chou, our NC Chairman, was completely unaware of the nominations,” he said, adding that Mr Chong “strongly objected” to bypassing the scheduled NC meeting on Feb 20.
The older Kwek immediately ordered all director interviews to be cancelled, “reinforcing the need for transparency and adherence to corporate governance norms”.
But he said Mr Lee called for a board meeting on Jan 31 “in an attempt to push through the proposed appointments”.
CDL calls for trading halt, cancels results briefing‘I want to get things done’: Billionaire Kwek Leng Beng on why it’s better to work hard and talk less
On Feb 5, the Board received legal advice that bypassing the NC was against the Code of Corporate Governance.
Regardless, on Feb 7, a board meeting was held with no vote being taken, and a Directors’ Resolution in Writing for the appointment of the two new directors was circulated and approved within hours, bypassing the NC.
“This confirmed that Sherman Kwek, Philip Lee, Wong Ai Ai and the other directors acting with them had pre-planned this move,” Mr Kwek said.
“I was left with no choice but to send an email on Feb 8, 2025 seeking Sherman’s dismissal from the position of group chief executive officer. His role in circumventing good governance and consolidating power through the irregular appointment of two new directors was the latest of a long series of missteps,” Mr Kwek said.
On Feb 9, the reconstituted board, led by Mr Phillip Lee, objected to the chairman’s attempt to dismiss Mr Sherman Kwek.
The older Kwek said this was not the first time his son’s decisions have put CDL in a “precarious position”.
He cited the Chinese developer Sincere Property Group episode that led to a $1.9 billion loss for CDL in 2020; investment decisions in the UK property market which contributed to a 94 per cent drop in profit the first half of 2023; as well as the underperformance of CDL’s share price since his son assumed leadership in 2018.
This reflects “eroded investor confidence and shareholder concerns over strategic missteps”, Mr Kwek Leng Beng said.
“As a father, firing my son was certainly not an easy decision. I accept that business decisions are difficult and young people may make business mistakes in their careers and that is understandable, but circumventing corporate governance laws is a red line,” he said.
“As chairman, my responsibility is to CDL, its shareholders, and its future. I take my role as executive chairman seriously and have always prioritised the interests of all shareholders, not just those of my family. The stakes are simply too high to allow reckless power grabs to destabilise the company.”
Dismantling the existing NC and replacing it with a Nominating and Remuneration Committee (NRC) is a “calculated effort to sideline independent oversight and give the majority bloc unrestricted control over CDL’s leadership and decision-making”, he claimed.
This restructuring, he alleged, leaves the election of key management personnel entirely at the discretion of Sherman’s group, and allows for arbitrary appointment and removal of board members.
It also strips the chairman of meaningful authority, he added.
“As an executive chairman, notwithstanding my decades of institutional knowledge, I am not able to have a position on the newly formed NRC,” he said.
Mr Kwek said he and several members of the board including Mr Phillip Yeo, remain committed to upholding the highest standards of governance and accountability.
To restore stability and realign CDL’s leadership with the interests of shareholders, he proposed the removal of Sherman as CEO as “CDL already has internal measures in place to ensure business stability in the absence of a CEO”.
Incumbent chief operating officer, Mr Kwek Eik Sheng, can serve as the interim CEO, maintaining continuity while the group searches for a professional CEO, Mr Kwek Leng Beng said.
“We will reinforce and strengthen CDL’s governance framework to prevent future violations and ensure that no single group can override corporate governance safeguards,” he said.
ST has tried to contact Mr Sherman Kwek for comment.
Last year, CDL celebrated its 60th anniversary.
In 1971, Mr Kwek Leng Beng, his brother Kwek Leng Joo and their father, Mr Kwek Hong Png, bought control of a loss-making CDL.
Under Mr Kwek’s leadership, CDL grew to become a major hotel and property developer, with footprints growing beyond Singapore.
Mr Kwek’s statement comes after a trading halt was called and CDL cancelled its scheduled 2024 results briefing on the morning of Feb 26.
Mr David Gerald, president of Securities Investors Association (Singapore), or Sias, said it “hopes that the board issue will be resolved amicably among the relevant parties in the best interest of all CDL stakeholders. It encourages the directors of CDL’s board to work towards a fair and constructive resolution”.
In August 2024, Mr Sherman Kwek was appointed as patron of Sias.
CDL shares closed at $5.12 on Feb 25.
