Stormy Waters at City Developments Ltd.

A heated dispute erupted during the annual general meeting of City Developments Ltd. (CDL), the real estate titan controlled by Singapore's wealthiest Kwek family. What was intended to be a show of solidarity turned into a dramatic clash as board members aired grievances over recent leadership decisions.

Boardroom Brawl: New Appointments Spark Controversy

Tensions flared when Philip Yeo, a long-time board member, expressed disappointment over the hasty appointment of two new directors in February, which was made against the wishes of executive chairman Kwek Leng Beng. This move has not only deepened divisions within the Kwek clan but also prompted Leng Beng to push for the removal of his son, Sherman Kwek, as CEO shortly after the appointments.

Yeo criticized the lack of a thorough approval process, arguing for a consensus before adding new directors. "It should not be by a majority disregarding the chairman," he asserted, highlighting concerns about the board's governance.

Family Fractures: The Public Fallout

The discord between the Kweks became public in late February when Leng Beng accused Sherman of orchestrating a boardroom coup, a claim Sherman publicly denied. This family feud escalated to the point of litigation but was eventually retracted in mid-March, with a promise to move forward for the benefit of the company.

Shaky Foundations for CDL: Investor Concerns Grow

During the meeting, Sherman acknowledged the difficult position the company finds itself in, citing a staggering 37% drop in profits to S$201.3 million ($153 million) in 2024, significantly below analyst expectations. He humorously remarked on the financial burden of debt, saying it often feels like he is working for the bank.

Despite Yeo's passionate dissent, all independent directors up for reelection were overwhelmingly voted back into position, reflecting the strong influence the Kwek family maintains over nearly half of CDL’s shares.

A Call for Stability: Looking to the Future

As approximately 450 attendees filled CDL's meeting venue in Singapore, many expressed frustration over the ongoing turmoil impacting shareholder value. Investor Gary Saw noted that the visible discord highlights a disconnection between management and the interests of minority shareholders, warning that such conflicts could further depress the company’s stock performance.

With CDL shares plummeting over 70% since their peak in 2007, Sherman vowed to improve the company’s trajectory, with ambitious divestments planned for 2025, aiming for figures that surpass last year’s low performance. Additionally, he floated the idea of listing CDL’s UK assets under a real estate investment trust, pending favorable market conditions.

The Road Ahead: Challenges and Opportunities for CDL

As the Kwek family navigates this public scrutiny and internal conflict, the focus will be on stabilizing leadership and enhancing shareholder confidence in CDL’s prospects. With pressures mounting from both within and outside, only time will tell how this family drama unfolds and what it means for the future of one of Singapore's largest property developers.