“The meeting was quite a disaster,” said Gary Saw, a CDL shareholder who attended the event on Wednesday.
“It shows a real division among the management, board, and interests of minority shareholders,” said the 56-year-old, as cited by Bloomberg.
While the annual general meeting was expected to showcase unity in the board, especially between executive chairman Kwek Leng Beng and his son, CEO Sherman Kwek, board members’ comments about the source of the dispute gave shareholders the impression that management disagreement would likely linger in one of the Singapore’s biggest property developers.
“I am very disappointed in the way the two new directors were appointed,” said Philip Yeo, a non-executive director who has been with CDL for 16 years.
Yeo added that he rejected the reelection of the pair and two other directors.
He was referring to the February appointment of Jennifer Duong Young, a former Credit Suisse employee, and Wong Su-Yen, a former chair of the Singapore Institute of Directors.
The appointments were approved without the consent of all directors, including chairman Leng Beng, who is the 10th richest man in Singapore.
“There must be consensus. It should not be by a majority of directors pushing, and disregarding the chairman,” Yeo said.
Wong, one of the two disputed directors, said Wednesday that the appointments had to be rushed in February for the safety of the company.
She likened it to a doctor ignoring hospital rules mandating parental approval for an urgent procedure, choosing instead to act swiftly to save a child bitten by a poisonous snake.
“If I wait, and I cannot find the parent, the child may die,” she said.
Regardless of the bickering comments from both sides of the board, all five of CDL’s independent directors who were up for reelection were reappointed on Wednesday afternoon by an overwhelming majority of shareholders.
The meeting, however, failed to reassure many of the 450 participants about the prospect of the firm, especially as figures have indicated a downturn in performance.
“Unnecessary conflicts” have hurt CDL’s share price, and been detrimental to its shareholders, said Saw. “Family businesses will have family dynamics but this shouldn’t be happening in a professionally run company.”
The public dispute of CDL’s management began with Leng Beng filing a lawsuit against his son Sherman in late February, alleging that he and other directors were attempting a coup to take over the company.
But Leng Beng withdrew the lawsuit on March 13, citing a unanimous decision among board members to set aside their differences in the interest of CDL and its stakeholders.
The disagreement, however, added on to the challenges the company has been facing in recent years. CDL’s stock value has plummeted over 70% from its 2007 high and has lagged behind most Singapore-listed real estate stocks since Sherman took the helm as CEO in 2018.
CEO Sherman, in a presentation Wednesday, admitted that the company was “at one of the lowest points,” with the board dispute having negative impact on shareholders.
CDL saw a 37% decline in profit to SGD201 million (US$153 million) last year, and Sherman attributed the decline to the SGD589 million in interest expense the company had to pay.
But he pledged to improve CDL’s performance, saying that it expects divestment in 2025 to exceed the roughly SGD600 million the developer made last year.
