CDL father-son saga: time for strategic review

[SINGAPORE] Shareholders of City Developments Ltd (CDL) probably heaved a huge sigh of relief over the announcement late on Wednesday (Mar 12) that Kwek Leng Beng had dropped his lawsuit against his son Sherman Kwek and six other members of the CDL board.

CDL’s share price rallied immediately following this announcement. However, are the group’s troubles over?

Shareholders might wonder if the father-son duo can work harmoniously after their high-profile spat. More crucially, CDL’s board of directors should urgently launch a strategic review to improve the group’s performance.

According to Wednesday’s announcement, Kwek Leng Beng and Sherman Kwek will continue as executive chairman and group chief executive officer, respectively. Also, all the current directors, including Jennifer Duong Young and Wong Su-Yen, remain on the board.

The announcement appears to bring closure to an ugly saga at the property and hotel group. Kwek Leng Beng wanted to remove Sherman Kwek as CEO citing governance issues. Sherman Kwek and the majority of the board countered that they were concerned over the conduct of Dr Catherine Wu who has a “long relationship with the chairman”.