According to a recent statement from City Developments’ (CDL) executive chairman Kwek Leng Beng, the company has put a stop to the “serious lapses” in corporate governance that were previously occurring.
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This comes after a court hearing on Feb 26, during which two newly appointed directors, Jennifer Duong Young and Wong Su Yen, agreed not to exercise any powers as directors until further notice from the court. These two directors were “irregularly and hastily appointed” on Feb 7 through written resolutions by the existing directors.
Kwek also revealed that his son, Sherman Kwek, Philip Lee, Wong Ai Ai, and other directors acting with them, have agreed not to take any further actions in regards to their attempted changes to the board committees and management of CDL’s subsidiaries until further notice from the court. Additionally, the “irregularly constituted” nominating and remuneration committee has been suspended from taking any further actions.
With this resolution, CDL’s board committees and the management of its subsidiaries are now protected from any further attempts to destabilize and restructure them. According to Kwek, strong corporate governance is crucial for a successful and sustainable business, as it ensures transparency, accountability, and responsible decision-making, which are all important for maintaining investor confidence and safeguarding the long-term interests of shareholders.
On the morning of Feb 26, CDL announced a trading halt and the cancellation of its FY2024 results briefing, citing a disagreement within the board regarding the board’s composition and constitution. Despite this, the company’s business operations remain unaffected, and Sherman Kwek remains the group chief executive officer until a board resolution is made to change company leadership.
Kwek’s first press statement accused his son, Lee, Wong, and a group of directors acting with them, of attempting to gain control of the board and company. He also mentioned that he had filed court papers on Feb 25 to address this issue, and stated that it was necessary to deal with the “attempted coup”. The company will seek to change the CEO at the right time and is prepared to use all legal options to defend and protect the interests of CDL and its shareholders. In the event that Sherman is removed as CEO, Kwek EIk Sheng, the current chief operating officer, will serve as interim CEO.
CDL’s stock last traded at $5.12 before the trading halt on Feb 26.