Kwek Leng Beng, 84, Singapore’s fourth richest billionaire and CDL’s executive chairman, on Tuesday filed a lawsuit against his son Sherman Kwek, the firm’s group CEO, along with a group of board members and directors, for alleged governance lapses and an “attempted coup” to consolidate control of the company’s board, as reported by The Straits Times.
The power struggle left the firm in turmoil, but before that, it had undergone a six-decade transformation to become one of Singapore’s largest property developers.
Founded in 1963, CDL had completed several housing projects before it was acquired by Hong Leong Group, the Kwek family’s business, in 1972, according to the company’s website.
Leng Beng, along with his father and brother, took over the struggling CDL and began its turnaround by acquiring Guan Realty, which developed CDL’s first mixed-use project, the City Plaza.
In the 1980s, CDL launched 21 residential projects and finished 12 investment properties, including the Republic Plaza, its flagship and current headquarters. It became Singapore’s largest listed property developer with a market cap exceeding S$2 billion by the end of that decade.
Leng Beng was named executive chairman in 1995, while his brother became managing director.
That same year, CDL acquired the Copthorne Hotel chain to establish the Millennium & Copthorne Hotels, which was later listed on the London Stock Exchange. It also bought the Plaza Hotel in New York from Donald Trump, selling it in 2013 for US$675 million.
Even amid the Sars outbreak in Asia during the 2000s, CDL pushed ahead with over 50 housing projects, including The Sail @ Marina Bay, which at the time was Singapore’s tallest residential tower.
Sherman, the third-generation heir, stepped into the role of CDL’s CEO in 2018 after spending over two decades working within the family business, according to Bloomberg.
At first, the transition appeared seamless, with the family avoiding the high-profile conflicts that often accompany succession.
But Sherman’s tenure was soon marred by several stumbles, particularly his ambitious push to expand in China. In 2019, he spearheaded CDL’s acquisition of a stake in Sincere Property Group, a move initially praised as a breakthrough for its growth strategy.
However, within a year, China’s property crisis turned the deal into a major setback, nearly wiping out the entire billion-dollar investment and leading to a S$1.9 billion loss in 2020.
The downturn was compounded by the pandemic’s travel restrictions, which battered the company’s hotel revenue.
CDL offloaded its stake in Sincere for a token sum of US$1 in 2021 and reported an S$85 million profit for that year, down from the over S$500 million seen in the pre-Covid years.
Profits rebounded to a record S$1.3 billion in 2022 but later tumbled to S$317.3 million in 2023 and S$201.3 million in 2024.
The company unexpectedly canceled its FY2024 post-results briefing and suspended trading on Wednesday morning, around the time Leng Beng issued a statement announcing his lawsuit, The Business Times reported.
In his statement, the executive chairman said Sherman had also made “poor investment decisions in the UK property market,” which caused significant financial losses to CDL. He also claimed that its shares have consistently trailed those of its rivals since his son took charge.
“His role in circumventing good governance and consolidating power through the irregular appointment of two new directors was the latest of a long series of missteps,” he said.
