CDL's Kwek Leng Beng drops legal action against son Sherman 2 weeks after filing suit, says board members united for 'greater good'

SINGAPORE: City Developments Limited (CDL) executive chairman Kwek Leng Beng on Wednesday (Mar 12) night dropped the lawsuit against his son and group CEO Sherman over alleged governance lapses and what he had described as an attempted power grab at the board level.

Court papers were filed on Feb 25 to address what he described as an attempted "coup" by the younger Kwek and to restore corporate integrity.

In a statement, the elder Kwek said: "I have decided that the legal action that was launched in regard to the board resolutions taken since Feb 7, 2025 will be discontinued.

"I will continue in my role as executive chairman, and Sherman Kwek will continue as group Chief Executive Officer. All the current directors, including Jennifer Duong Young and Su Yen Wong, will remain on the CDL board."

In a regulatory filing on Wednesday, CDL confirmed that the "court proceedings have been settled and will be discontinued".

"The board will continue to focus on strengthening the company’s business and will continue to act in accordance with good corporate governance and strive to maximise shareholder value."

The senior Kwek added that all the board members had agreed to "put aside their differences" for the "greater good" of CDL and its stakeholders.

"We will all continue to focus on strengthening CDL’s business, in accordance with good corporate governance, now and in the future, including completing the raft of landmark developments underway across Singapore and globally, furthering the expansion of various brands under (group subsidiary) Millennium & Copthorne, continuing our capital recycling initiative and above all, maximising shareholder value," he said.

Ms Duong and Ms Wong were appointed as independent non-executive directors on Feb 7, with the elder Kwek then indicating their appointments were a pre-planned effort by his son and other directors to consolidate control.

BOARDROOM BATTLE 

CDL, which is controlled by the Kwek family, is one of Singapore's largest property companies.

The family feud erupted on Feb 25 when Mr Kwek Leng Beng moved to dismiss his son, Sherman, as group CEO, filing a lawsuit. 

He pointed out the financial losses suffered by the company under his son's leadership, including what he described as “poor investment decisions” in the UK property market that resulted in significant financial losses as well as a S$1.9 billion (US$1.43 billion currently) loss from CDL's investment in Chinese developer Sincere Property in 2020. 

Mr Sherman Kwek, who has been group CEO since 2018, later issued a statement, calling his father's actions "extreme" and said his legal action was not authorised by the majority of the board.

He singled out his father's former personal assistant, Dr Catherine Wu, as the source of the dispute within CDL. According to him, Dr Wu had been "interfering in matters going well beyond her scope", and "wields and exercises enormous influence".

He reiterated that there had been "no attempt by us to oust the chairman".

On Mar 4, Mr Kwek Leng Beng said that Dr Wu had resigned from her position as an unpaid independent adviser to the board of Millennium & Copthorne Hotels, a CDL subsidiary.

In his statement then, he said that his son had "sought to justify his board coup and overt breaches of corporate governance with unproven insinuations about Dr Wu".

"Now that Dr Wu has resigned, the CEO and his team of directors no longer have any continuing basis to make such corporate governance allegations about CDL and to justify his board coup," he added.

On Mar 6, the Securities Investors Association (Singapore) posed a slew of questions to CDL over the roles that Dr Wu held at the group's subsidiary.

The retail investor watchdog also sought clarity on the management structure and decision-making process at CDL, specifically on the reporting lines for the group CEO and group chief operating officer Kwek Eik Sheng.

Both warring camps had two closed-door hearings at the Singapore High Court before the decision to end the lawsuit was made.

CDL's shares last traded at S$4.94 on Wednesday – its shares had closed at S$5.12 on Feb 25 before a three-day trading halt was called.

CNA understands that CDL's annual general meeting is likely to be held on Apr 23.