What we know about Kwek Leng Beng, his son Sherman Kwek and the battle for control of CDL

THE DISPUTE AND THE SINCERE PROPERTY DEAL

In his statement on Wednesday (Feb 26), Kwek Leng Beng said court papers were filed on Tuesday to address what he described as an attempted “coup” by his son and a group of directors, including lead independent director Philip Lee and independent non-executive director Wong Ai Ai.

The dispute centres on events that began on Jan 28 when an email was sent to the board nominating two new independent directors. The timing, on the eve of Chinese New Year, and the rush to approve the appointments raised concerns, said Kwek Leng Beng.

He added that Chong Yoon Chou, the chairman of the nomination committee, was “completely unaware” of the nominations.

Despite objections, a board meeting was convened on Feb 7. No vote was taken, but hours later, a written resolution approving the appointments was passed, said the older Kwek.

According to him, the move indicated a pre-planned effort by his son and other directors to consolidate control.

Tensions escalated when Kwek Leng Beng sought his son’s removal as group CEO on Feb 8, citing his role in what he called “the latest of a long series of missteps”. 

The elder Kwek pointed to past business decisions under his son’s leadership that have “put CDL in a precarious position”, including a S$1.9 billion loss from CDL’s investment in Chinese developer Sincere Property in 2020 and poor returns from UK property ventures.

The Sincere deal was supposed to be CDL’s most ambitious expansion into China, but the COVID-19 pandemic put a dent in plans. The Chinese firm was also in a worse financial state than expected.

This is not the first time relations have been strained in the Kwek clan.

In 2020, Kwek Leng Beng’s cousin Kwek Leng Peck resigned as non-executive and non-independent director of CDL after more than three decades, citing disagreements over the Sincere investment, which was led by Sherman Kwek.

The resignation grabbed media attention, with Bloomberg calling it “a rare moment of public discord” in the Kwek family.

If the legal action by Kwek Leng Beng against his son is successful, Kwek Eik Sheng will serve as interim group CEO should Sherman Kwek be removed.

Kwek Leng Beng said in a statement late Wednesday night that his son and the other directors acting with him have agreed not to take further action after a court hearing.

The two new directors have undertaken not to exercise any powers as directors until further notice of the court.

Sherman Kwek and the other directors have also undertaken not to take further actions regarding changes to board committees, said the elder Kwek.