CITY Developments Ltd (CDL) group chief executive officer Sherman Kwek said recent changes to the board have “never been about ousting our esteemed chairman”, responding to moves by his father and executive chairman Kwek Leng Beng to remove him as CEO after an alleged “attempted coup”.
The elder Kwek on Wednesday (Feb 26) morning said that he had filed court papers “to set things right” after “Sherman Kwek, Philip Lee, Wong Ai Ai and a group of directors acting with them, have sought to consolidate control of the board and the group”. Lee is the lead independent director, and Wong is an independent non-executive director at CDL.
In a statement on Wednesday, issued “on behalf of the majority of the CDL board of directors”, Sherman Kwek said: “It is incredibly disappointing that our chairman and a minority of the City Developments Limited board have decided to take these extreme actions regarding this disagreement around the size and make-up of the CDL board.”
“Our focus as CEO and directors, as a board majority and with clear guidance and support from our company and independent legal counsel, has always been to implement steps to improve governance. These steps to strengthen our board have purely been to ensure CDL has the highest standards of governance to which it has become known, and our collective decision-making as a board is as robust as possible,” the statement said.
Kwek Leng Beng had earlier claimed that they had “bypassed the Nomination Committee (NC) on two occasions to change the composition of the Board and hastily followed up by making significant changes to Board committees and the governance of the Group”.
Two individuals – Wong Su Yen and Jennifer Duong Young – were nominated to join the board as independent directors on Jan 28, on the eve of Chinese New Year. The chairman “questioned the urgency of appointing an additional two new directors, emphasising that such significant governance decisions should not be rushed without due diligence and proper vetting”.
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On Feb 7, the two were appointed to the board after a meeting with “no vote being taken”. This “confirmed that Sherman Kwek, Philip Lee, Wong Ai Ai and the other directors acting with them had pre-planned this move,” said the elder Kwek in his statement.
In a separate statement, CDL said that Sherman Kwek remains the group CEO until such time as there is a board resolution to change company leadership.
“As the matter is currently under review, the company will make further announcements should there be any material developments in this matter, in line with Singapore Exchange listing rules,” it added.
On Wedneday morning, the senior Kwek said that the filing of court papers was “necessary to deal with this attempted coup at the board level and restore corporate integrity”.
“We intend to change the CEO 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.
Kwek Eik Sheng, group chief operating officer and the nephew of Kwek Leng Beng, was named to serve as interim CEO “if and when Sherman is removed as CEO”, while the group hunts for a professional CEO to lead the company.
In its statement, CDL said it took the decision to temporarily suspend trading in its shares on Wednesday, in view of the disagreement within the board in relation to its composition and constitution, and the board committees.
“Despite this temporary suspension, our business operations remain fully functional and unaffected,” it added.
Sherman Kwek noted that CDL had suspended trading of its shares as “this issue now comes before the courts, despite this legal action not being authorised by the majority of the board”.
“As the matter is now before the courts for adjudication, we will not comment on the merits of the case and will make further announcements if there are any material developments,” he added.
