An adviser at the center of the City Developments Ltd. (CDL) boardroom brawl between billionaire Kwek Leng Beng and his son, Sherman, has resigned a week after the family feud became public.
The elder Kwek announced the irrevocable resignation of Catherine Wu, an adviser to the board of CDL’s Millennium & Copthorne Hotels, late Tuesday. Last week, the chairman sued his son to quash what he called as an “attempted coup at the board level” instigated by Sherman Kwek, group CEO of CDL, and some board members.
Sherman disclosed on Thursday that the dispute with his father was partly due to concerns that Wu, whom he claimed has a long term relationship with the elder Kwek, had been interfering with the affairs of M&C and that presented a very serious corporate governance issue. He and other board members had proposed to terminate Wu’s advisory agreement.
“Now that Wu has resigned, the CEO and his team of directors no longer have any continuing basis to make such corporate governance allegations about CDL and to justify his Board coup,” the chairman said in a statement late Tuesday. “It is high time we restore investor confidence and ensure those breaches of corporate governance committed by the CEO and his team of directors will never happen again.”
Shares of City Developments rose 2% in Wednesday morning trading in Singapore, recouping some of this week’s losses. The stock had fallen to its lowest level since 2009 and the company had lost its status as Singapore’s most valuable publicly listed developer after analysts from JPMorgan to RHB Bank downgraded their ratings.
The very public boardroom brawl is casting the limelight on one of Singapore’s wealthiest families with an estimated net worth of $11.5 billion. Besides the S$4.5 billion (market cap) City Developments, the Kwek family also holds interests in building materials, diesel engines, finance and packaging.
The elder Kwek together with his late brother Kwek Leng Joo and their father, Kwek Hong Png, bought loss-making City Developments in 1969 and transformed it into one of the city-state’s largest property developers with S$26 billion of assets across Asia, U.K, and the U.S., including the iconic Republic Plaza tower in Singapore’s Raffles Place central business district and the historic waterfront landmark St. Katharine Docks in London.
Kwek Leng Beng is also executive chairman of privately held Hong Leong Group, which was founded by his father in 1941 as a trading firm. His cousin Quek Leng Chan, also a billionaire, owns and runs a separate group in Malaysia, also called Hong Leong, a name that translates into ‘good harvest.’