CDL shares up more than 4% after Kwek Leng Beng drops lawsuit against son

The latest turn in events came two weeks after the family feud spilled into public view on Feb 26, when Mr Kwek Leng Beng accused his son of mounting a boardroom “coup”.

The dispute centred on the appointments of two new independent non-executive directors – Ms Jennifer Duong Young and Ms Wong Su-Yen – that the senior Kwek said were “hastily” made without going through CDL’s nomination committee.

Over the next few days, explosive statements emerged from both camps, raising concerns over the property giant’s corporate governance and business stability. 

The saga also prompted the Securities Investors Association (Singapore), or SIAS, to pose a slew of questions to the company over its board appointments and the role of a former advisor Dr Catherine Wu, who was named by Mr Sherman Kwek as the primary reason for the public fallout with his father.

INVESTOR CONCERNS REMAIN: ANALYSTS

Amid the power tussle, CDL called for a trading halt on Feb 26. Its shares fell more than 6 per cent to fresh 16-year lows upon resumption of trade on Mar 3, but recovered slightly over the week.

Research houses have since slashed their target prices for the company’s shares. RHB, for example, downgraded the stock to neutral from buy, and cut its target price to S$4.75 from S$7.30.

RHB’s analysts said while the latest reconciliatory move offers small respite, it “does not fully address the various corporate governance issues and board differences that were raised during the dispute”.

Investors will still want to seek full resolution of these concerns, greater clarity on the company’s plan to maximise shareholder returns, and additional safeguards to prevent similar corporate governance and board-related issues from arising again, the analysts wrote in a note on Thursday morning.

As a result of these investor concerns, RHB expects CDL’s share price to “be rangebound in the near term”.