Update, Feb. 27: 2025: After a court hearing on Wednesday, City Developments Limited (CDL) chairman Kwek Leng Beng said that the company's "serious lapses" of corporate governance were halted according to CNA.
The two independent directors allegedly nominated outside of standard procedures—the source of the dispute between Kwek and his son, CDL CEO Sherman Kwek—had "undertaken not to exercise any powers as directors until further notice of the court". Sherman Kwek and other CDL board directors also agreed not to take further action.
Singaporean property developer City Developments Limited (CDL) called for a halt to trading on Wednesday morning, soon after unveiling annual results. A subsequent statement gave few details, blaming a “disagreement within the Board” for the delay and affirming that CEO Sherman Kwek was the company’s chief executive.
But reports were emerging of a fierce family feud between CDL's chairman and its CEO—a father and his son respectively—that had plunged the developer into crisis.
In a statement shared with local media and also seen by Fortune, CDL chairman Kwek Leng Beng accused his son, Sherman Kwek, of “serious lapses of corporate governance” in pushing through board changes without a proper review.
The elder Kwek said he had filed a lawsuit to “set things right” and confront an “attempted coup.”
The CDL chairman’s statement lays out the timeline of events. On Jan. 28, the day before the Lunar New Year holiday, CDL’s corporate secretary sent an email to the board that nominated two new independent directors for the board; Kwek said the chairman of the board’s nomination committee was unaware of the nominations.
Despite objections from the elder Kwek and the chairman of the board’s nomination committee, a board meeting was held on Feb. 7 and a statement following the meeting confirmed the appointment of the two new directors.
The elder Kwek said in his statement that the events meant Sherman and other directors had pre-planned this move.
The board meeting was held ahead of a prescheduled nomination committee meeting on Feb. 20, which was intended to ensure a proper review process of any proposed new independent director, according to the elder Kwek’s statement.
CDL’s chairman said he had “no choice” but to call for his son’s dismissal as CEO, with the nomination crisis being “the latest of a long series of missteps.” But the now reconstituted board objected.
In his statement, the elder Kwek pointed to several poor business decisions, including a write-down of CDL’s investment in Sincere Property, a Chinese property developer, that led to a 1.9 billion Singapore dollar ($1.4 billion) loss in the developer’s 2020 financial year. CDL’s chairman also accused his son of “poor investment decisions in the U.K. property market,” contributing to a 94% drop in profits in the first half of 2023, and complained that CDL’s share price has underperformed its peers since his son assumed leadership in 2018.
“Firing my son was certainly not an easy decision,” CDL’s chairman wrote in his statement. “Young people may make business mistakes in their careers…but circumventing corporate governance laws is a red line.”
In his statement, Kwek Leng Beng said that his nephew, CDL chief operating officer Kwek Eik Sheng, will serve as interim CEO “if and when Sherman is removed as CEO.”
When reached for comment, CDL pointed Fortune to its press statement filed on the Singapore exchange, which states that Sherman remains as CEO “until such time as there is a Board resolution to change company leadership.”
In a statement to media outlets on behalf of a majority of CDL's board, Sherman said it was "incredibly disappointing that our chairman and a minority of the CDL board have decided to take these extreme actions regarding this disagreement around the size and make-up of the CDL board."
What is CDL?
City Development Limited is a Singapore real estate developer that spans 163 locations across 29 countries. The company is ranked No. 101 on Fortune’s Southeast Asia 500, which ranks the region’s largest companies by revenue.
The Hong Leong Group, a diversified conglomerate, took over CDL in 1972. Kwek Leng Beng’s father, Kwek Hong Png, led the acquisition.
The Kwek family feud was unveiled the same day that CDL released its 2024 results. The property developer reported annual revenue of 3.3 billion Singapore dollars ($1.7 billion), a 33.8% year-on-year decline. Profits also plunged 36.6% to hit 201.3 million Singapore dollars ($150.3 million). CDL blamed the profit drop on construction delays and lower contributions from its property development business.
The company’s earnings release includes comments from both Kweks—father and son—who each acknowledged macroeconomic challenges.
