A new statement from City Developments (CDL) executive chairman Kwek Leng Beng declares that the “serious lapses” in corporate governance at the company have been stopped. This comes after a recent court hearing on February 26 where two new directors, Jennifer Duong Young and Wong Su Yen, were hastily and unlawfully appointed on February 7.
These directors have agreed not to exercise any powers as directors until further notice from the court. Kwek also mentions that his son, Sherman Kwek, Philip Lee, Wong Ai Ai, and other directors who acted in concert with them, have also agreed not to take any further actions regarding their attempted changes to the board committees and management of certain CDL 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, the board committees and management of relevant subsidiaries are now safe from further attempts to destabilize and reconstitute them. Kwek emphasizes the importance of strong corporate governance as the foundation of a well-functioning and sustainable business. It ensures transparency, accountability, and responsible decision-making, which are crucial for maintaining investor confidence and protecting the long-term interests of shareholders.
On February 26, CDL announced a trading halt and last-minute cancellation of its FY2024 results briefing, citing a disagreement within the board regarding its composition and constitution. Despite this, the company’s operations remain unaffected and Sherman Kwek remains the group CEO until a board resolution is made to change the company’s leadership.
In his first statement, Kwek accused his son, Lee, and Wong, along with a group of directors, of attempting to consolidate control of the board and the group. He also mentioned filing court papers on February 25 to address the “attempted coup”, and reassured shareholders that he intends to change the CEO at the appropriate time. In the interim, Kwek EIk Sheng, the current COO, will serve as the interim CEO.
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CDL’s trading was suspended at $5.12 on the morning of February 26, before the trading halt was announced.