Prior to the role, Dr Wu was a director on the board from June 2022 to January 2024

 

DR CATHERINE Wu, the woman said to have a &ldquo long relationship&rdquo with City Developments Ltd (CDL) executive chair Kwek Leng Beng, has resigned from her role as an independent adviser to the board of Millennium & Copthorne Hotels (M& C), a subsidiary of CDL.

 

In a statement late on Tuesday (Mar 4), Kwek said that she has resigned from her post as an &ldquo unpaid independent adviser&rdquo with immediate effect. She has been at the post since August 2024.

 

Prior to this role, she had been a director on the board from June 2022 to January 2024.

 

Kwek noted that his son and CDL group chief executive Sherman Kwek &ldquo sought to justify his board coup and overt breaches of corporate governance with unproven insinuations about Dr Wu&rdquo .

 

This was in response to a statement Sherman Kwek issued on Feb 27 stating that the &ldquo primary reason&rdquo for the ongoing dispute at CDL is &ldquo a very serious issue of corporate governance&rdquo involving Dr Wu.

 

The younger Kwek said that Dr Wu interfered in matters &ldquo going well beyond her scope&rdquo as an adviser to the board of M& C, and that &ldquo she wields and exercises enormous influence&rdquo .

 

In Tuesday&rsquo s statement, the elder Kwek said: &ldquo Now that Dr 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.&rdquo

 

He added that CDL has to &ldquo restore investor confidence&rdquo and ensure that alleged breaches of Singapore Exchange listing rules and code of corporate governance by the CEO and some directors &ldquo will never happen again&rdquo .

 

In his earlier statement on Feb 26, the elder Kwek had called for Sherman Kwek to be replaced as group CEO, naming chief operating officer Kwek Eik Sheng as interim CEO until a professional CEO is found.

 

This comes as Kwek Leng Beng believes several issues occurred at the company under his son&rsquo s leadership, which he reiterated in Tuesday&rsquo s statement. These issues include the Sincere Property debacle that resulted in &ldquo an extraordinary loss&rdquo of S$1.9 billion in FY2020, as well as &ldquo poorly judged investment decisions&rdquo in the UK property market, which led to a 94 per cent decline in profits during the first half of 2023.

 

The elder Kwek added that CDL&rsquo s share price has &ldquo persistently lagged behind its peers&rdquo since Sherman Kwek stepped into his role in 2018, and that the current dispute and alleged breaches of listing rules resulted in the shares dropping even further.

 

&ldquo The first step in addressing these challenges should be to strengthen the corporate governance framework in a way that aligns with shareholders&rsquo long-term interests,&rdquo said Kwek Leng Beng.

 

Feud goes to court

The father-son rift at the property group came to light in late February, when Kwek Leng Beng said he filed court papers on Feb 25 seeking an injunction against two new directors at CDL, Jennifer Duong Young and Wong Su-Yen, whom he said were brought on board in an attempted coup orchestrated by Sherman Kwek to oust him.

 

The injunction sought to prevent the new directors from exercising the powers of a director.

 

Kwek Leng Beng also sought to overturn resolutions passed by the CDL board on Feb 21 concerning Dr Wu. These resolutions were to terminate the advisory agreement that Dr Wu has with M& C, and to affirm that Dr Wu had no power and authority over the directors, management and staff of both CDL and M& C.

 

Sherman Kwek&rsquo s statement on Feb 27 noted that the resolutions were considered necessary to &ldquo protect the interests of the shareholders and relevant staff of the CDL Group, and to restore proper corporate governance and accountability&rdquo .

 

He noted that Dr Wu has a &ldquo long relationship&rdquo with his father, and that &ldquo efforts that were made to manage the situation were done sensitively, but to no avail&rdquo .

 

Sherman Kwek added that there has been &ldquo no attempt by us to oust the chairman&rdquo .

 

Following an initial court hearing on Feb 26, the two new directors have undertaken not to exercise any powers as directors until further notice, while Sherman Kwek and the group of directors have undertaken not to take any further actions regarding their attempted changes to the board committees and management of certain CDL subsidiaries.

 

A hearing has been fixed for Apr 11 to hear evidence from both parties.

 

Kwek Leng Beng, CDL and directors Philip Yeo, Colin Ong and Chong Yoon Chou are the applicants in the case. They are represented by lawyers from LVM Law Chambers, a law firm led by Senior Counsel Lok Vi Ming.

 

The defendants are Sherman Kwek, Wong Su-Yen, Young, Carol Fong (also known as Carolina Chan), Daniel Desbaillets, Wong Ai Ai and Philip Lee Jee Cheng. They are represented by Senior Counsel Davinder Singh and his law firm Davinder Singh Chambers, as well as a Lee & Lee team led by Julian Tay.