On Tuesday, CDL executive chairman and Singapore billionaire Kwek Leng Beng, 84, sued his son, Sherman Kwek, the company’s group CEO, alleging he attempted to consolidate control over the board, The Straits Times reported. The elder Kwek also accused two board members and a group of directors of staging an “attempted coup.”
In response, Sherman Kwek, 49, said he and most of CDL’s board were “disappointed” by what he described as his father’s “extreme actions.” In an emailed statement to Reuters, he added that proposed board changes had “never been about ousting our esteemed chairman.”
Industry experts weighed in on the dispute, as reported by The Business Times.
According to Tan Teck Leng, deputy chief investment officer at Phillip Capital Management, the legal battle raises concerns over CDL’s leadership succession, but its fundamental value remains intact as it is anchored by hard assets. He adds that property developers’ share price weakness has been a sector-wide trend. He believes CDL will continue to be a market proxy when positive sentiment returns.
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City Developments Limited’s Chairman, Kwek Leng Beng and his son, CEO Sherman Kwek. Photos courtesy of City Devopments Limited |
Corporate governance remains a concern despite CDL’s reputation for sustainability, Mak Yuen Teen, a corporate governance advocate and professor at the National University of Singapore Business School, says. He points to CDL’s past expansion into China, which resulted in a rapid write-off, as well as previous boardroom turmoil, as signs of governance weaknesses. He emphasizes that family businesses must prioritize strong corporate governance to survive across generations, adding that sustainability must be built on a foundation of good governance.
Ken Foong, an analyst from Bloomberg Intelligence notes that CDL’s 2025 core profit could grow from its housing, hotels, and investment properties, but the ongoing dispute creates near-term uncertainty. Long-term prospects, however, remain strong, particularly in the living sector, which offers stable earnings potential.
A report from DBS Group Research projects short-term share price volatility but states that CDL’s core businesses will remain unaffected. The firm’s revenue-generating hard assets—including property development, hotels, and investment properties—remain supported by its key management team.
The Singapore Securities Investors Association hopes both parties to resolve the conflict “amicably” in the best interest of stakeholders and encourages CDL’s board to work toward a “fair and constructive” resolution.
Leng Beng and his family share a combined net worth of US11.5 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 and properties in nearly 30 countries.
