The lawsuit was filed in Singapore’s courts on Tuesday against his son Sherman Kwek, 49, board members Philip Lee and Wong Ai Ai, and a group of directors, according to The Straits Times.
“This is necessary to deal with this attempted coup at the board level and restore corporate integrity,” Leng Beng, 84, said in a statement on Wednesday.
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Kwek Leng Beng (L), executive chairman of City Developments Limited, and Sherman Kwek, group CEO of City Developments Limited. Photo courtesy of Reuters, City Developments Limited |
The executive chairman claimed that his son, who has served as CDL’s group CEO since 2018, collaborated with certain board members to sidestep the nomination committee (NC) twice in order to alter the board’s composition, CNA reported.
They then swiftly made major changes to board committees and the company’s governance, he further alleged.
According to Leng Beng, the “attempted coup” allegedly started unfolding on Jan. 28, the eve of the Lunar New Year, when he was informed that Lee and Wong had nominated two additional independent directors.
Concerned about the timing and the rush to get the nominees approved, he questioned the move the next day, pointing out that the NC chairman was unaware of the nominations and had strongly opposed bypassing the NC meeting scheduled for Feb. 20.
Lee justified the rushed appointments by citing “urgent concerns” but did not provide details, prompting Leng Beng to call off all director interviews.
A board meeting was held on Feb. 7 despite the opposition and a written resolution approving the appointments was passed within hours, even though no vote was conducted.
“This confirmed that Sherman Kwek, Philip Lee, Wong Ai Ai and the other directors acting with them had pre-planned this move,” Leng Beng said.
The following day, he emailed the board seeking to remove Sherman from his position, but the newly restructured board, now led by Lee, rejected the dismissal.
“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,” Leng Beng said.
CDL, in a statement cited by Forbes, announced the cancellation of a planned media briefing on Wednesday morning and the temporary suspension of its share trading amid “disagreement within the board.”
It said business operations continue as usual despite the suspension and that Sherman remains the group CEO until a board resolution says otherwise.
Sherman has also issued a statement in response to his father’s lawsuit, asserting that the recent board reshuffle was never intended to remove the respected chairman but instead to “strengthen the board” and “ensure CDL has the highest standards of governance.”
“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 CDL board,” he said, as quoted by The Business Times.
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.
