By Omnia Law Chambers LLC and Iconomy Corporate Consultancy Pte. Ltd.
Introduction: What’s Happening at CDL?
One of Singapore’s largest property developers, City Developments Limited (CDL), is in the midst of a dramatic family and corporate power struggle. The company’s Executive Chairman, Kwek Leng Beng, is attempting to remove his own son, Sherman Kwek, from his role as CEO.
This dispute is not just a personal feud—it has serious implications for corporate governance, shareholders, and the future of CDL. It has even led to the suspension of CDL’s share trading and raised questions about the company’s leadership stability.
To make sense of it all, we have broken the situation so that investors, business owners, and the general public can understand the key issues at stake.
Who Are the Key Players?
- Kwek Leng Beng – The father, CDL’s Executive Chairman, and a major shareholder. He has been instrumental in CDL’s growth.
- Sherman Kwek – The son, CDL’s CEO since 2018, and the alleged instigator of the boardroom coup.
- CDL Board of Directors – The governing body of the company, responsible for overseeing management decisions.
- CDL Shareholders – Investors who own shares in CDL and whose financial interests are affected by the dispute.
The Conflict: A Family Feud with Business Consequences
1. Alleged Boardroom “Coup” – How Did Sherman Bypass the Nomination Committee?
🔹 What is a Nomination Committee?
A Nomination Committee is a group of independent directors within the company’s board. Its role is to:
- Evaluate and select candidates for board positions.
- Ensure board appointments meet governance and experience requirements.
- Prevent conflicts of interest in leadership changes.
Whilst not all companies have a nomination committee, for publicly listed companies like CDL, it is considered best practice under the Singapore Corporate Governance Code to ensure fairness and transparency in leadership transitions.
🔹 How Did Sherman Allegedly Bypass It?
Sherman Kwek and his allies appointed board members without submitting them for proper review by the nomination committee.
Instead of:
– Submitting board candidates for review by the nomination committee,
– Holding formal discussions and voting on the appointments,
He allegedly:
– Directly appointed or reshuffled board members without committee approval,
– Influenced key appointments to consolidate control over board decisions.
This gave him greater influence over board decisions, which his father, Kwek Leng Beng, saw as an attempted takeover of CDL’s leadership structure—hence the accusation of a “coup“.
🔹 Why Is This Important?
This raises serious governance concerns because:
- It undermines corporate checks and balances – The nomination committee exists to prevent any one individual from having excessive control.
- It raises questions about transparency – Investors expect a clear and fair process when leadership changes occur.
- It signals instability to shareholders – A company in internal conflict creates uncertainty, which can drive down share prices.
For a publicly listed company, breaches in governance can also trigger regulatory scrutiny, meaning that this is not just an internal dispute but a matter of public concern for investors, regulators, and corporate watchdogs.
2. Trading Suspension & Leadership Instability
In response to this escalating conflict, CDL suspended trading of its shares—a rare move that indicates how serious the situation has become.
Additionally, CDL cancelled its scheduled investor briefing, which raises further questions about the company’s stability and leadership direction.
What This Means for Businesses and Investors
🔹 Corporate Governance & Legal Takeaways
- Proper governance structures matter. A nomination committee ensures transparency and fairness in board appointments.
- Uncontrolled power struggles create legal risks. Boardroom disputes can lead to shareholder lawsuits, regulatory scrutiny, and legal battles.
- Leadership transitions must be handled properly. The way succession is managed determines a company’s long-term stability.
🔹 Business & Investment Insights
- Leadership quality directly affects share value. A company’s management decisions impact investor confidence and stock prices.
- High-risk investments must be carefully assessed. CDL’s China and UK property losses show how poor investment choices can destroy billions in shareholder value.
- Family businesses need succession planning. Without clear leadership transition plans, conflicts like this can destabilise even the most successful firms.
What Happens Next?
The future of CDL now hinges on several key developments:
- Legal actions – Whether the courts intervene in the leadership dispute.
- Investor reactions – Whether shareholders demand a change in management.
- Business recovery efforts – Whether CDL can stabilise its financial losses and governance issues.
For now, the father-son battle continues, and CDL’s future leadership remains uncertain.
Final Thoughts: Lessons from CDL’s Crisis
Whether you are a business owner, investor, or corporate professional, this case offers valuable lessons in:
- Corporate governance and legal accountability
- Business strategy, investment risks, and leadership decisions
At Omnia Law Chambers LLC and Iconomy Corporate Consultancy Pte. Ltd., we help businesses navigate corporate governance, leadership transitions, and legal risks. If you want to avoid boardroom conflicts in your own company, or has a conflict to resolve, we are here to help.
