City Developments Limited (CDL) executive chairman, Kwek Leng Beng, recently made a significant announcement regarding the future of the company following a court hearing on Wednesday (Feb 26). In a statement released that same evening, Kwek revealed that his son, Sherman, and other directors aligned with him have collectively decided not to pursue any further action in response to the court’s decision.
The crux of the matter lies in what Kwek described as “serious lapses” in corporate governance at CDL, which he claims have now been effectively addressed as a result of the court proceedings. The day had started with Kwek publicly declaring his intention to take legal action against his son, Sherman Kwek, who serves as the group CEO, citing alleged governance breaches and an apparent power struggle within the board.
According to Kwek, Sherman Kwek, along with directors Philip Lee and Wong Ai Ai, had been accused of sidestepping CDL’s nomination committee to push through changes in the board without the necessary review. The dispute initially stemmed from events that unfolded on Jan 28, when an email was sent to the board nominating two new independent directors.
Kwek further elaborated that these new directors were hastily appointed on Feb 7, 2025, through written resolutions by the directors, bypassing the standard protocols. As a result, Kwek Leng Beng stated that these newly appointed directors have agreed not to exercise their powers until further guidance from the court is received.
Moreover, Sherman Kwek, Philip Lee, Wong Ai Ai, and the other directors involved in the process have also committed to refraining from any further actions related to their proposed changes to the board committees and the management of certain CDL subsidiaries until the court provides additional directives. Additionally, the nominating and remuneration committee, which Kwek deemed as irregularly constituted, has been suspended from taking any further actions.
This development signifies a crucial step towards restoring stability within the board committees and the management of the relevant subsidiaries, safeguarding them from any potential disruption or restructuring attempts. Kwek emphasized the paramount importance of robust corporate governance, emphasizing that it forms the bedrock of a well-functioning and sustainable business by fostering transparency, accountability, and responsible decision-making.
According to Kwek, these principles are indispensable in maintaining investor confidence and safeguarding the long-term interests of shareholders. He reiterated his unwavering commitment to upholding these standards and stressed the significance of adhering to the highest governance benchmarks in all corporate affairs to ensure the stability and prosperity of CDL and its stakeholders.
Expressing his gratitude towards CDL’s shareholders and stakeholders for their continued trust and support, Kwek assured that further updates would be shared as needed. The commitment to protecting shareholders’ interests and fostering long-term value creation remains at the core of CDL’s mission, underpinned by a steadfast dedication to exemplary corporate governance practices.
