The recent events at City Developments (CDL) have been described as “serious lapses” in corporate governance by its Executive Chairman, Kwek Leng Beng. However, in a second statement released by Kwek, it seems that these lapses have been halted.
This follows a court hearing on Feb 26, where two newly appointed directors, Jennifer Duong Young and Wong Su Yen, have agreed not to exercise their powers as directors until further notice from the court. These two directors were appointed via directors’ resolutions in writing, but were deemed “irregular and hastily” appointed.
Kwek also stated that his son, Sherman Kwek, and Philip Lee, Wong Ai Ai, and other directors associated with them, have also agreed not to make any further changes to the board committees or management of CDL’s subsidiaries until the court gives further notice. Additionally, the “irregularly constituted” nominating and remuneration committee has been suspended from taking any further action.
This means that CDL’s board committees and the management of its subsidiaries are now protected from further attempts to destabilize or restructure them. Kwek stressed the importance of strong corporate governance in maintaining transparency, accountability, and responsible decision-making, which are crucial for maintaining investor confidence and protecting the interests of shareholders.
On the morning of Feb 26, CDL announced a trading halt and a last-minute cancellation of its FY2024 results briefing, citing a disagreement within the board over the composition and constitution of the board and board committees. However, CDL’s business operations remain unaffected and fully operational, with Sherman Kwek remaining as CEO until there is a board resolution to change leadership.
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In Kwek’s previous statement, he accused his son, Lee, Wong, and a group of directors of attempting to gain control of the board and the group. He also mentioned filing court papers on Feb 25 to address this “attempted coup”. Kwek reiterated that they will continue to explore all legal options available to defend and protect the interests of CDL and its shareholders.
The company’s shares were last traded at $5.12 before the trading halt on Feb 26.