Category: CDL, Kwek Leng Beng
City Developments (CDL) has put a stop to the serious lapses in corporate governance, according to a second statement released by executive chairman Kwek Leng Beng. This comes after a court hearing on Feb 26, in which the two newly appointed directors, Jennifer Duong Young and Wong Su Yen, have agreed not to exercise any powers as directors until further notice from the court. These two directors were appointed via resolutions in writing, which were deemed as hasty and irregular.
Kwek also mentioned that his son, Sherman Kwek, Philip Lee, Wong Ai Ai, and other directors who were acting together with them, have also agreed not to take any further action regarding their attempt to change the board committees and management of certain CDL subsidiaries until the court gives further notice. The nominating and remuneration committee, which was also constituted irregularly, has been suspended from taking any more action.
Kwek further stated that with these developments, the board committees and management of the relevant subsidiaries are now safe from any attempts to destabilize and reconstitute them. He emphasized that strong corporate governance is crucial for a sustainable and well-functioning business, as it ensures transparency, accountability, and responsible decision-making. These are essential for maintaining investor confidence and protecting the long-term interests of shareholders.
On Feb 26, CDL caught the market by surprise with a trading halt and a last-minute cancellation of its FY2024 results briefing. In a statement released at 1.51pm, CDL stated that the temporary suspension of trading and cancellation of the briefing were due to disagreements within the board regarding its composition and constitution.
However, CDL clarified that these developments have not affected its business operations, and Sherman Kwek remains the group CEO until further notice from the board. Kwek’s father, in his first statement, accused his son, Lee, and Wong, along with a group of directors, of trying to take control of the board and the group. He also mentioned that he had filed court papers on Feb 25 to deal with this attempted coup.
Kwek added that the company intends to change the CEO at the appropriate time and will explore all legal options to defend and protect the interests of CDL and its shareholders. In the event of Sherman’s removal as CEO, the current COO, Kwek EIk Sheng, will serve as the interim CEO.
CDL’s last traded share price was $5.12 before the trading halt on Feb 26.
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