A Singaporean billionaire is seeking to oust his son as chief executive of the family’s property company, accusing him of attempting a boardroom coup and poor business decisions.
Kwek Leng Beng, executive chair of Singapore’s biggest listed property company, City Developments, filed court papers outlining a family feud that has escalated in recent months, leading to the group suspending its shares on Wednesday morning.
Kwek, who is 84 this year, accused his son Sherman of attempting a board takeover with the help of two other directors. He alleged the three had been trying to bypass the company’s nomination committee to push through changes, describing the move as an “attempted coup”.
The chair asked the board to remove his son as chief executive at the beginning of February, but was outvoted by what he claims was a “reconstituted board”.
This week, he raised the stakes by taking legal action and asking Singapore’s courts to adjudicate the matter, citing “the latest of a long series of mis-steps” by his son.
Should Sherman Kwek be removed by the courts, he would be replaced by the company’s chief operating officer, Kwek Eik Sheng, Kwek Leng Beng’s nephew.
The elder Kwek said his son’s leadership had put the business in “a precarious position”, pointing to ill-fated investments in China and the UK.
Sherman Kwek became chief executive seven years ago and the group’s share price has fallen 60 per cent under his leadership.
“As a father, firing my son was certainly not an easy decision,” said Kwek Leng Beng.
“I accept that business decisions are difficult and young people may make business mistakes in their careers and that is understandable, but circumventing corporate governance laws is a red line.”
In a statement that he said was on behalf of himself and the majority of the City Development board, Sherman Kwek said: “It is incredibly disappointing that our chair and a minority of the CDL board has decided to take these extreme actions regarding this disagreement around the size and make-up of the CDL board.”
City Developments Limited was founded in 1963 and was taken over by the Kwek family in 1972. Since then it has grown to be one of Singapore’s biggest property companies, owning premium shopping centres, hotels, offices and housing developments across the city-state and increasingly buying overseas, with properties in the US and UK.
CDL suspended trading in its shares on Wednesday “in view of the disagreement within the board in relation to the composition and constitution of the board and the board committees”, it said.
The group also published full-year results on Wednesday, showing a 37 per cent drop in annual profits.
“Sherman Kwek remains the group chief executive officer until such time as there is a board resolution to change company leadership,” the company added.
