CDL director Philip Yeo says Sherman Kwek’s statement an 'attempt to distract' from issues
CEO Sherman Kwek should focus on making back S$1.9 billion in losses, says Philip Yeo, who is among the minority directors led by Kwek Leng Beng.
City Developments Limited non-independent non-executive director Philip Yeo and group CEO Sherman Kwek. (File photos: City Developments Limited website)
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SINGAPORE: A day after Mr Sherman Kwek named his father's associate as the source of a dispute within their company City Developments Limited (CDL), board member Philip Yeo emerged to criticise Mr Kwek's statement as "an attempt to distract everyone from the matter at hand".
Mr Yeo is among the minority directors led by Mr Kwek's father and executive chairman Kwek Leng Beng.
In a statement late on Friday (Feb 28), Mr Yeo said Mr Sherman Kwek - CDL's group CEO - and the directors acting with him intentionally circumvented the company's nomination committee and pushed through the appointment of two additional independent directors against legal advice.
"They quickly reconstituted the nomination committee and the remuneration committee as the nomination & remuneration committee to effectively immobilise the executive chairman," Mr Yeo said.
He added that Mr Sherman Kwek should focus on making back S$1.9 billion in shareholder losses from an investment involving Chinese developer Sincere Properties, as well as other losses from UK property investments.
"Instead, he seems more concerned about grievances, mobilising a group of independent directors to remove an adviser to the CDL hospitality business, which has actually seen profit improvements for the past few years since COVID," Mr Yeo said.
The adviser in question is Dr Catherine Wu, whom Mr Sherman Kwek said has a "long relationship" with his father. According to him, she has been "interfering in matters going well beyond her scope" and "wields and exercises enormous influence".
Mr Sherman Kwek said on Thursday that her actions have "troubled" the directors, who then proposed a resolution to terminate the advisory agreement Dr Wu has with the board of Millennium & Copthorne Hotels (M&C), a subsidiary of CDL.
"We considered them to be necessary to protect the interests of the shareholders and relevant staff of the CDL Group, and to restore proper corporate governance and accountability," the group CEO said on Thursday.
CDL is one of Singapore's largest property companies.
The family feud and power struggle spilled into the public domain on Wednesday when Mr Kwek Leng Beng said his son was attempting a boardroom "coup". The older man took legal action against his son and the majority directors to restore corporate integrity.
Both men have since made several public statements, each laying out their account of the events that led to the fallout.
Mr Yeo waded into the war of words on Friday, calling on Mr Sherman Kwek to work with the entire board to make money for all shareholders.
"CDL was acquired by Mr Kwek Hong Png, Mr Kwek Leng Joo and Mr Kwek Leng Beng," he added, referring to Mr Kwek Leng Beng's late father and brother.
"I know all three of them well. The men of our era all dared to dream. That is how the three of them executed so well to build a multi-billion-dollar Singaporean company that competes on a global scale. The CDL CEO must learn from them. Just pure hard work to serve all shareholders!"
Mr Yeo is a former civil servant whose decades of experience includes serving as executive chairman of the Economic Development Board (EDB) from 1986 to 2001 and as executive co-charmain at EDB from 2001 to 2006.
SHERMAN'S ALLEGATIONS "MISLEADING": KWEK LENG BENG
In a separate statement on Friday, Mr Kwek Leng Beng reiterated that his legal action stemmed from serious concerns about his son’s attempt to undermine the governance structure of CDL.
He also hit back at his son’s remarks about a court hearing on Wednesday afternoon. Mr Sherman Kwek had described the court hearing as an attempt to "ambush" the majority directors, giving them only two and a half hours notice. This resulted in the majority directors voluntarily offering undertakings to preserve the status quo until a full hearing could take place.
"The allegations made by Sherman regarding the remarks of the court are misleading," said Mr Kwek Leng Beng.
"The urgency of our application stemmed from our serious concerns about Sherman and the directors acting with him attempting to undermine and disrupt the governance structure of CDL," he added.
"The bottom line is that following the court hearing, the two additional independent directors cannot act and the changes to the board committees and the management of the relevant CDL subsidiaries are frozen, pending any further court order.
"It is important to highlight that Sherman and the directors acting with him provided those undertakings only because they were sued."
Mr Kwek Leng Beng said he takes "great pride" that CDL was ranked number two in the Singapore Governance and Transparency Index 2024, adding that the company has always upheld the highest standards of corporate governance.
"As chairman, it is my duty to ensure that we continue to do so. Any real or perceived difference of opinion within the board, regarding external advisers or otherwise, should be resolved within the appropriate corporate governance framework, not by way of a board coup or directors’ resolutions in writing,” he said.
On his son's statement saying there was no attempt to oust him, Mr Kwek Leng Beng said: "This misses the point. Protecting good governance, including the office of the executive chairman, and not me as an individual, is critical. Stripping away any meaningful authority of the executive chairman is a coup. It is now a matter before the court and I will let the court decide. Justice always prevails."
