According to a recent statement issued by City Developments (CDL) executive chairman Kwek Leng Beng, the company’s “serious lapses” in corporate governance have come to a halt. This follows a court hearing on Feb 26, where two new directors, Jennifer Duong Young and Wong Su Yen, who were “irregularly and hastily appointed” on Feb 7, have agreed not to exercise any powers as directors until further notice from the court.
Kwek also adds that his son, Sherman Kwek, Philip Lee, Wong Ai Ai, and other directors acting with them, have also agreed not to take any further action regarding their attempted changes to the board committees and management of certain CDL’s subsidiaries, until further notice from the court. The “irregularly constituted” nominating and remuneration committee has also been suspended from taking further action.
With this development, CDL’s board committees and the management of its subsidiaries are now safe from any further attempts to destabilize, dismantle, and reconstitute them, according to the elder Kwek. He emphasizes the importance of strong corporate governance, which ensures transparency, accountability, and responsible decision-making, to maintain investor confidence and protect the long-term interests of shareholders.
On the morning of Feb 26, CDL announced a trading halt and last-minute cancellation of its FY2024 results briefing, due to a disagreement within the board regarding the board’s composition and constitution. However, the company’s business operations remain unaffected, and Sherman Kwek remains the group’s chief executive officer.
It is crucial for overseas investors to have a thorough understanding of Singapore’s property ownership regulations and restrictions. The country permits foreigners to purchase condominiums with relative ease, while the ownership guidelines for landed properties are more stringent. It is worth noting that foreign buyers must adhere to the Additional Buyer’s Stamp Duty (ABSD), which currently stands at 20% for their initial property acquisition. Nonetheless, the stable and promising growth of the Singapore real estate market remains a major draw for foreign investment. With the added option of new condo launches, the appeal for foreign buyers is only increasing.
In his first statement, the elder Kwek accused his son, Lee, Wong, and a group of directors acting with them, of trying to gain control of the board and the group. He has filed court papers to “set things right,” stating that it is necessary to deal with the attempted coup. Kwek also mentions that they intend to change the CEO at an appropriate time, and if Sherman is removed, the current COO, Kwek EIk Sheng, will serve as the interim CEO.
CDL’s shares last traded at $5.12 before its trading halt on Feb 26.