What we know about Kwek Leng Beng, his son Sherman Kwek and the battle for control of CDL

SINGAPORE: A battle for control between father and son is brewing in one of Singapore's biggest property developers.

Kwek Leng Beng, the executive chairman of City Developments Limited (CDL), is attempting to sack his son Sherman as group CEO. He has also filed a lawsuit over alleged governance lapses and an attempted power grab at the board level.

The Kwek clan is among Singapore's most recognisable business names, with the conglomerate spanning three generations.

Here's what we know about the family and their tussles.

THE KWEK BUSINESS EMPIRE

Kwek Leng Beng, 84, is the executive chairman of Hong Leong Group, a conglomerate founded by his late father Kwek Hong Png in 1941.

Hong Leong has core businesses in property development, hotels, financial services, as well as trade and industry. It acquired a controlling stake in CDL in 1972. 

CDL was struggling financially in 1969 when Kwek Leng Beng suggested to his father to start building up their stake in the company.

Under their leadership, CDL turned profitable "through strategic diversification into investment properties", according to the company's website.

This began with the acquisition of Guan Realty (Private) Limited in 1972, which developed City Plaza, CDL’s first mixed-use development.

CDL later entered the hospitality market with a hotel-buying spree, starting with the acquisition of King’s Hotel (now Copthorne King’s Hotel Singapore) in 1980. 

In 1995, CDL acquired the iconic Plaza Hotel New York from Donald Trump and purchased the Copthorne Hotel chain, adding more hotels in the UK, Germany and France.

Kwek Leng Beng's brother, Kwek Leng Joo, joined the company as a director in 1980 and helped to steer its strategic direction. He was also its deputy chairman until his death in 2015.

Kwek Leng Beng's cousin, Quek Leng Chan, runs the Hong Leong Group in Malaysia.

KWEK LENG BENG'S SUCCESS

According to a write-up on the National Library Board's website, Kwek Leng Beng did not always share his father's drive for business.

He studied law at the University of London, but his father wanted a frontline role for him. 

In 1967, Kwek Leng Beng joined Hong Leong Finance as general manager and director.

He became CDL's managing director in 1974 and succeeded his father as executive chairman of Hong Leong Group by 1990. 

Kwek Leng Beng built a reputation for acquiring valuable assets at bargain prices, and is known to be efficient and decisive in sealing deals.

For instance, in the 1995 purchase of the Plaza Hotel from Trump, he teamed up with Saudi prince Al Waleed bin Talal Al Saud to complete the deal at US$455 million. The hotel was sold for US$675 million in 2004.

He was named Asia-Pacific Hotelier of the Decade in 2000 after a panel of six hotel experts voted him as the man who has made the greatest impact on the industry globally.

Today, CDL owns over 150 hotels worldwide, according to its website.

Forbes estimates Kwek Leng Beng's net worth to be US$3.4 billion.

PASSING THE BATON

Kwek Leng Beng's son Sherman, 49, joined CDL in 2010.

A Boston University graduate with a Bachelor of Science in Business Administration, he has held senior management roles in CDL, including deputy CEO and chief investment officer. He has led the company’s expansion in Singapore, China, Japan, Australia and the United Kingdom for over a decade.

He became CDL's group CEO in January 2018 and was appointed as an executive director in May 2019. 

His cousin Kwek Eik Sheng, the son of Kwek Leng Joo, joined CDL in 2009, covering business development for its overseas projects.

He assumed the role of chief strategy officer in 2013 and was appointed as its group chief operating officer on Jan 1, 2022.

THE DISPUTE AND THE SINCERE PROPERTY DEAL

In his statement on Wednesday (Feb 26), Kwek Leng Beng said court papers were filed on Tuesday to address what he described as an attempted "coup" by his son and a group of directors, including lead independent director Philip Lee and independent non-executive director Wong Ai Ai.

The dispute centres on events that began on Jan 28 when an email was sent to the board nominating two new independent directors. The timing, on the eve of Chinese New Year, and the rush to approve the appointments raised concerns, said Kwek Leng Beng.

He added that Chong Yoon Chou, the chairman of the nomination committee, was "completely unaware" of the nominations.

Despite objections, a board meeting was convened on Feb 7. No vote was taken, but hours later, a written resolution approving the appointments was passed, said the older Kwek.

According to him, the move indicated a pre-planned effort by his son and other directors to consolidate control.

Tensions escalated when Kwek Leng Beng sought his son’s removal as group CEO on Feb 8, citing his role in what he called "the latest of a long series of missteps". 

The elder Kwek pointed to past business decisions under his son's leadership that have "put CDL in a precarious position", including a S$1.9 billion loss from CDL's investment in Chinese developer Sincere Property in 2020 and poor returns from UK property ventures.

The Sincere deal was supposed to be CDL's most ambitious expansion into China, but the COVID-19 pandemic put a dent in plans. The Chinese firm was also in a worse financial state than expected.

This is not the first time relations have been strained in the Kwek clan.

In 2020, Kwek Leng Beng's cousin Kwek Leng Peck resigned as non-executive and non-independent director of CDL after more than three decades, citing disagreements over the Sincere investment, which was led by Sherman Kwek.

The resignation grabbed media attention, with Bloomberg calling it "a rare moment of public discord" in the Kwek family.

If the legal action by Kwek Leng Beng against his son is successful, Kwek Eik Sheng will serve as interim group CEO should Sherman Kwek be removed.

Kwek Leng Beng said in a statement late Wednesday night that his son and the other directors acting with him have agreed not to take further action after a court hearing.

The two new directors have undertaken not to exercise any powers as directors until further notice of the court.

Sherman Kwek and the other directors have also undertaken not to take further actions regarding changes to board committees, said the elder Kwek.