A longtime board member of City Developments Ltd., the property giant controlled by Singapore’s wealthiest family, lashed out at several other directors on Wednesday over a recent feud that rocked the developer and the billionaire Kwek clan.

The Singapore-listed company’s annual general meeting was meant to show a united front between its executive chairman Kwek Leng Beng, his son and chief executive officer Sherman Kwek, and the rest of its 11-member board.

Instead, sparks flew after several directors began bickering about how two new board members were hurriedly appointed in February, after they were voted in by a majority of the board despite the chairman’s opposition. The development caused a rift within the Kwek family, and led Leng Beng to seek Sherman’s dismissal as CEO shortly after.

“I am very disappointed in the way the two new directors were appointed,” said Philip Yeo, a former top Singapore civil servant who has been a non-executive director at CDL since 2009. He said he opposed the reelection of the pair and two other directors at Wednesday’s shareholders meeting.

The Kwek family feud became public in late February, when the elder Kwek accused Sherman of orchestrating a boardroom coup at CDL — an allegation the CEO denied. That month, the octogenarian, Yeo and two other CDL directors filed a lawsuit in a Singapore court against Sherman and a majority of the board.

After the dispute escalated, the case was dropped in mid-March. A statement from Leng Beng then said he and Sherman would continue in their roles, and all board members had “agreed to put aside their differences for the greater good of CDL and its stakeholders.”

Lingering Tensions

Yeo’s remarks showed that there are still tensions among board members of the 62-year-old company.

Jennifer Duong Young, who spent 21 years at Credit Suisse, and Wong Su-Yen, a former chair of the Singapore Institute of Directors, joined CDL’s board in February. They were nominated by two independent CDL directors on the eve of the Chinese Lunar New Year, and appointed a week and a half later. The company said in its annual report that their appointments took place “without the usual process of prior review and recommendation” by the board’s nominating committee.

When asked on Wednesday to justify her rushed appointment, Wong came up with an analogy of a doctor bypassing hospital protocol requiring parental consent for a life-saving procedure, in order to save a child bitten by a venomous snake. “If I wait, and I cannot find the parent, the child may die,” she said.

She was interrupted by Yeo, who said independent director appointments should be unanimously approved, in his view.

“There must be consensus. It should not be by a majority of directors pushing, and disregarding the chairman,” Yeo said. He said some CDL directors put themselves on the board of the company’s Millennium & Copthorne Hotels subsidiary without the approval of Leng Beng, who is also the unit’s chairman. “That’s totally improper,” Yeo said.

Despite Yeo’s comments, which drew applause from some meeting attendees, all five of CDL’s independent directors who were up for reelection were reappointed on Wednesday afternoon by an overwhelming majority of shareholders. The Kwek clan owns nearly half of CDL’s shares, with ownership spread among multiple family members.

Difficult Period

In a presentation about CDL’s performance, Sherman said the developer has gone through a difficult period and is “at one of the lowest points.” The 49-year-old added that the recent board dispute has also affected its shareholders.

The company earlier reported a 37% drop in 2024 profit to S$201.3 million ($153 million), missing analysts’ estimates. Sherman said CDL’s interest expenses of S$589 million last year eroded profits, and reducing its high debt load is a priority.

Referring to the interest payments CDL had to make, he quipped that it sometimes feels like “I’m working for the bank.”

City Developments' Fading Fortunes

Soured China foray and higher debt from acquisitions have hit profits

Source: Company results

Note: Net income excludes the share belonging to minority interests. Ratio is computed using total borrowings less cash, over total equity (including fair value on investment properties).

Around 450 people attended CDL’s annual general meeting, according to a company spokesperson. It was held at one of the company’s downtown Singapore hotels, and there was an overflow room and webcast to accommodate the larger-than-usual turnout.

“The meeting was quite a disaster,” said Gary Saw, a CDL shareholder who attended the event. “It shows a real division among the management, board, and interests of minority shareholders,” said the 56-year-old.

He said the “unnecessary conflicts” have hurt CDL’s share price, and been detrimental to its shareholders. “Family businesses will have family dynamics but this shouldn’t be happening in a professionally run company,” said Saw, who works at a tech startup.

CDL’s shares have declined more than 70% from a 2007 peak, and have underperformed most Singapore-listed real estate stocks since Sherman became the company’s CEO in 2018. They were down around 4% this year through Wednesday’s close.

Singapore Developer's Shares Have Underperformed

Source: Bloomberg

Data is normalized with percentage appreciation as of April 24, 2024.

Sherman pledged at the meeting to improve CDL’s performance, saying that it expects divestments in 2025 to exceed the roughly S$600 million the developer made in 2024. The firm fell short of a S$1 billion target that year.

He also said he will explore listing CDL’s UK assets under a real estate investment trust when market conditions permit, after a previous planned listing a few years ago was shelved. “The results are unsatisfactory,” he said in response to another question. “I’m not making excuses.”

CityDev jumps 2.65% at 10:38 am, Apr 24th.