On Mar 4, Kwek Leng Beng, executive chairman of City Developments Ltd (CDL), announced that Dr Catherine Wu, “an unpaid independent advisor”, has resigned from the board of directors at Millennium & Copthorne Hotels Ltd, the hotel arm and wholly-owned subsidiary of CDL with immediate effect.
According to Kwek, Dr Wu has held the post of advisor since August 2024, and before that, she was a director of the M&C board between June 2022 and January 2024.
“During her tenure at Millennium & Copthorne Hotels, Dr Wu contributed well in many of Millennium & Copthorne Hotels’ achievements. We are grateful to Dr Wu for her service over the years and wish her well in her future endeavours,” says the elder Kwek in his statement.
Following Wu’s resignation, Sherman Kwek, his son and group CEO of CDL, and his team of independent directors will no longer be able to make “such corporate governance allegations” about CDL and justify his board coup, says the elder Kwek.
The younger Kwek had alleged that Dr Wu was the primary reason behind the group’s dispute. “Although her official position is an advisor to the board of M&C, a wholly owned and principal subsidiary of CDL Group, she has been interfering in matters going well beyond her scope, and she wields and exercises enormous influence. These matters have troubled us as directors,” Sherman alleged in his Feb 27 statement.
With Dr Wu’s resignation, the elder Kwek said that it was “high time” that the group “restore investor confidence” and ensure that the breaches by his son and his team of directors, which includes breaching the Singapore Exchange’s (SGX) listing rules and the code of corporate governance “will never happen again”.
Leng Beng also reiterated the points he made from his first statement, that CDL, under Sherman’s leadership as CEO, suffered an “extraordinary loss” of $1.9 billion in FY2020 thanks to the Sincere Property debacle.
In addition, he blamed his son for “poorly judged investment decisions” in the UK, which led to “substantial financial setbacks” that led to a 94% drop in profits in CDL’s 1HFY2023 results.
Finally, he noted that CDL’s share price has also “persistently lagged” behind its peers since Sherman became CEO in 2018, adding that shares in the group fell even further from the recent breaches.
“The first step in addressing these challenges should be to strengthen the corporate governance framework in a way that aligns with shareholders’ long-term interests,” says Leng Beng. “Our utmost focus on CDL’s core businesses is critical and essential for regaining a stable path of profitability. I am convinced that such an approach will surely restore investor confidence and enhance shareholder value over time.”
Shares in CDL closed 3 cents lower or 0.6% down at $4.97 on March 4.
