SINGAPORE, Feb 26 — A power struggle has erupted at property giant City Developments Limited (CDL), with executive chairman Kwek Leng Beng seeking to remove his son, group chief executive Sherman Kwek, over an alleged boardroom coup.
Kwek Leng Beng said he has initiated legal proceedings to address what he described as an attempt by his son, along with board members Philip Lee, Wong Ai Ai, and other directors, to consolidate control over CDL’s board, according to a report published in The Straits Times today.
“This is necessary to deal with this attempted coup at the board level and restore corporate integrity,” he said.
“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.”
According to the chairman, Sherman’s group bypassed the nomination committee (NC) twice to alter the board’s composition and made significant changes to board committees and governance, actions he claimed were contrary to corporate governance principles, Singapore Exchange Listing Rules, and the Code of Corporate Governance.
The dispute surfaced following a series of events in January.
On January 28, CDL’s corporate secretary informed the board that Lee and Wong had nominated two independent directors.
The appointments of Jennifer Duong Young, a former Credit Suisse executive, and Wong Su Yen, who has experience across multiple industries, were announced on February 7 after the resignation of Tan Kian Seng.
On February 8, Kwek Leng Beng questioned the urgency of these appointments, stating that NC chairman Chong Yoon Chou had not been informed and had “strongly objected” to bypassing the NC’s scheduled meeting on February 20.
Lee cited “urgent concerns” to justify the move but did not provide specifics, Kwek claimed.
He said that despite legal advice warning that bypassing the NC was against governance codes, a board meeting on February 7 approved the appointments without a vote, with the Directors’ Resolution in Writing approved within hours.
“This confirmed that Sherman Kwek, Philip Lee, Wong Ai Ai, and the other directors acting with them had pre-planned this move,” Kwek Leng Beng said.
On February 8, Kwek Leng Beng sent an email seeking Sherman’s dismissal as CEO, citing his role in bypassing governance norms.
However, on February 9, the reconstituted board, led by Lee, objected to the move.
“I was left with no choice but to send an email on February 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,” Kwek Leng Beng said.
Kwek Leng Beng said this was not the first time his son’s decisions had jeopardised CDL.
He pointed to the company’s S$1.9 billion loss in 2020 following its investment in Chinese developer Sincere Property Group, as well as missteps in the UK property market that contributed to a 94 per cent drop in profit in the first half of 2023; and the underperformance of CDL’s share price since his son took over the reins in 2018.
“As a father, firing my son was certainly not an easy decision,” he said.
“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 accused the board of dismantling the NC and replacing it with a Nominating and Remuneration Committee (NRC) to sideline independent oversight and grant unrestricted control over CDL’s leadership.
This move, he said, limits the chairman’s authority and gives Sherman’s group control over board appointments.
“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.”
“As executive chairman, notwithstanding my decades of institutional knowledge, I am not able to have a position on the newly formed NRC,” he said.
Kwek Leng Beng said he and several board members, including Phillip Yeo, remain committed to strong governance.
To restore stability, he proposed removing Sherman as CEO, stating that CDL has internal measures to ensure business continuity.
Chief operating officer Kwek Eik Sheng could serve as interim CEO while the company searches for a professional replacement, he added.
“We will reinforce and strengthen CDL’s governance framework to prevent future violations and ensure that no single group can override corporate governance safeguards.”
ST has reached out to Sherman Kwek for a response.
CDL marked its 60th anniversary last year.
In 1971, Kwek Leng Beng, along with his brother Kwek Leng Joo and their father Kwek Hong Png, took over the then-struggling company.Under Kwek Leng Beng’s leadership, CDL expanded into a prominent hotel and property developer with a presence beyond Singapore.CDL’s 2024 results briefing was cancelled, and a trading halt was called on February 26 following the public dispute.David Gerald, president of the Securities Investors Association (Singapore), urged all parties to work towards a “fair and constructive resolution.”CDL shares closed at S$5.12 (RM16.93) on February 26.