Leng Beng, the 84-year-old CDL chairman captured market observers’ attention earlier this week by filing a lawsuit against his son and CEO of the firm, accusing him of making unauthorized moves to add two new directors to the board in an attempt to take over the company.
The legal action was one of the latest moves in a series of events which began last month at City Developments Limited, the owner of hundreds of hotels globally.
Below is a timeline of events compiled by Channel News Asia.
Jan. 28: Two board members put forward the names of two individuals as potential independent directors in an email communication to the City Developments Limited board.
Jan. 29: Chairman Leng Beng expressed his doubts regarding the need to quickly appoint two new independent directors at that particular moment.
He questioned the haste surrounding the appointments, especially as it was just before the Chinese New Year holiday.
He also noted that Chong Yoon Chou, who heads the nomination committee, was “completely unaware” of these proposed nominations, which he found concerning.
Jan. 31: Board member Philip Lee, one of the two directors who first made the proposal, requested a board meeting to discuss the matter.
Feb. 7: The meeting took place, after which a written decision was circulated confirming the appoints of Jennifer Duong Young and Wong Su Yen as the two new independent non-executive directors.
This happened although no formal vote was conducted, according to Leng Beng, who interpreted the sequence of events as evidence of a deliberate and pre-orchestrated scheme by his son and certain directors to gain firmer control of the company.
Feb. 8: The situation intensified when Leng Beng communicated via email his desire to remove Sherman, 49, from his position as group CEO. He justified this action by pointing to what he described as “the latest of a long series of missteps” by his son.
Leng Beng highlighted past business decisions made under Sherman’s leadership which he believed placed the company in a “precarious position.”
He mentioned the SGD1.9 billion (US$1.4 billion) debt which stemmed from Sherman’s decision to invest in a Chinese company in 2020, and unsatisfactory performance of property ventures in the U.K.
Feb. 9: The board of directors opposed Leng Beng’s move to dismiss Sherman from his CEO post.
Feb. 21: City Developments Limited, in a public filing, announced that it would combine the nominating committee and remuneration committee in order to streamline oversight and consider the appointment of key personnel.
Feb. 25: Leng Beng and his supporting directors filed a lawsuit against Sherman and his collaborators, seeking the High Court intervention to block an attempted “coup” and to restore corporate integrity.
Feb. 26: Leng Beng publicly accused his son and a group of directors of circumventing the company’s established nomination committee processes.
He said in a statement: “As a father, firing my son was certainly not an easy decision.”
“I accept that business decisions are difficult and young people may make business mistakes in their careers and that is understandable, but circumventing corporate governance laws is a red line.”
City Developments Limited suspended the trading of its shares on the same day. The company, however, assured shareholders that Sherman remained its CEO.
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Sherman Kwek, CEO of City Developments Limited. Photo courtesy of the company |
Sherman, in his own statement, said that his father had made “extreme” actions, and assured that his decisions were made for the benefit of the company.
“It is incredibly disappointing that our chairman and a minority of the City Developments Limited board have decided to take these extreme actions regarding this disagreement around the size and make-up of the board,” he said.
“Our focus as CEO and directors, as a board majority and with clear guidance and support from our company and independent legal counsel, has always been to implement steps to improve governance,” he added.
The decisions had never been about “ousting our esteemed chairman,” Sherman said.
After a court hearing in the afternoon, Leng Beng said that his son and the directors who supported him had agreed to cease further action until a court ruling is made.
Feb. 27: Sherman identified Catherine Wu, his father’s former personal assistant, as being at the root of the conflict within the company.
Wu, 65, is an adviser to the board of Millennium & Copthorne Hotels, a subsidiary City Developments Limited.
Sherman claimed that Wu had been “interfering in matters going well beyond her scope”, adding that “she wields and exercises enormous influence”.
“These matters have troubled us as directors. Due to her long relationship with the chairman, efforts that were made to manage the situation were done sensitively, but to no avail,” he said in a statement.
He further explained that his group’s decision was necessary to protect the interests of the shareholders and relevant staff of City Developments Limited.
The legal teams of both parties are scheduled to appear for another private High Court hearing on March 4th.
Leng Beng and his family share a combined net worth of US$11.5 billion, making him the fourth richest billionaire in Singapore, according to a ranking list by Forbes last September.
CDL, among Singapore’s largest property developers, has a market capitalization of S$4.6 billion (US$3.4 billion) and properties in nearly 30 countries.
