Kwek Leng Beng, executive chairman of City Developments (CDL), has issued a second statement declaring that the “serious lapses” in corporate governance at the company have been halted.Following a court hearing on Feb 26, two new directors who were appointed on Feb 7 have agreed not to exercise any powers as directors until further court notice. These new directors, Jennifer Duong Young and Wong Su Yen, were appointed as independent non-executive directors by written resolutions of the board of directors.Kwek also explained that his son, the chief executive officer of CDL Sherman Kwek, Philip Lee, Wong Ai Ai, and other directors who have worked with them have agreed not to take any further action in regards to changing board committees and management of certain subsidiaries. The new nominating and remuneration committee that was created without following the required protocols has been put on hold.The statement by Kwek states that CDL’s board committees and management are now safe from further attempts to disrupt and reorganize them. He said that strong corporate governance is key for a well-operating and sustainable business. It establishes transparency, responsibility, and careful decision-making which are significant for maintaining the trust of investors and safeguarding the best interests of shareholders.On the morning of Feb 26, CDL surprised the market by halting trading and cancelling its briefing on its FY2020 results, slated for later that day.A media statement by CDL released at 1:51 pm said the trading halt was due to a disagreement within the board in regards to the constitution of the board and its committees.Despite this temporary suspension, the company is still functioning without any disruption. Sherman Kwek continues to be the group CEO until a decision is made by the board to remove him.Kwek’s first statement pointed out his son and a group of directors who are in cahoots with him attempted to take control of the board and the company.Kwek added that on Feb 25, he initiated legal action to rectify the situation and resolve the attempted coup. He said that should Sherman be removed as CEO, the current COO Kwek Eik Sheng, will be the interim CEO.On the morning of Feb 26, CDL traded at $5.12 before the trading halt.
City Developments (CDL) has announced that the recent “serious breaches” of corporate governance have been stopped, as per a second statement issued by CDL’s executive chairman, Kwek Leng Beng. This came after a court hearing on Feb 26, where the two newly appointed directors, Jennifer Duong Young and Wong Su Yen, have agreed to not exercise any powers as directors until further notice from the court. These directors were “irregularly and hastily appointed” on Feb 7 through written resolutions by the board.
Kwek Leng Beng clarified that his son, Sherman Kwek, Philip Lee, Wong Ai Ai, and the remaining directors who were acting with them, have also agreed not to take any further action in regards to 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.
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With this development, CDL’s board committees and the management of the relevant subsidiaries are now protected from any further attempts to destabilize, dismantle and reconstitute them, according to Kwek. He also stressed the importance of strong corporate governance, which ensures transparency, accountability, and responsible decision-making, all of which are critical for maintaining investor confidence and protecting the long-term interests of shareholders.
On the morning of Feb 26, CDL caused a stir in the market when it called for a trading halt and canceled the scheduled FY2020 results briefing later that day. In a statement released at 1:51 pm, CDL attributed the temporary suspension of trading in its shares to a disagreement within the board regarding the composition and constitution of the board and its committees. However, the company assured that its business operations remain unaffected and fully functional, and Sherman Kwek remains the group CEO until a board resolution is made to change company leadership.
In his first press statement, Kwek Leng Beng accused his son, Lee, Wong, and a group of directors of trying to consolidate control of the board and the company and announced that he had already filed court papers on Feb 25 to “set things right.” He emphasized that this move was necessary to deal with the “attempted coup” and that the company will continue to explore all legal options to defend and protect the interests of CDL and its shareholders. He also stated that if Sherman is removed as CEO, the current COO, Kwek Eik Sheng, will serve as the interim CEO.
CDL’s shares last traded at $5.12 before the trading halt on Feb 26.