SINGAPORE –

A dramatic family feud involving billionaire tycoon Kwek Leng Beng, executive chairman of City Developments Limited (CDL), and his son, Sherman Kwek, the company's group chief executive, has seemingly come to an end, thanks to the intervention of trusted family friends and senior establishment figures in Singapore. Sources revealed that these neutral parties facilitated a truce following a lengthy period of public disagreements that not only strained family relations but also saw CDL’s stock price plummet to a 16-year low.

The conflict ignited after a series of sharp media exchanges, escalating tensions that peaked with Mr. Kwek Leng Beng announcing the resignation of Dr. Catherine Wu as an 'unpaid independent adviser' to CDL’s hotel subsidiary, Millennium & Copthorne Hotels (M&C). Mr. Sherman Kwek accused Dr. Wu of overstepping her advisory role, claiming she had exercised undue influence over the family business and the board.

The mediation took a serious turn around March 12, when Mr. Kwek Leng Beng abruptly decided to withdraw a lawsuit he had initiated to prevent Sherman and other majority directors from implementing board resolutions he deemed detrimental to his authority. With the lawsuit retracted, both Kweks will retain their leadership roles at CDL, aiming to unify the board and concentrate on revitalizing the company's performance.

In the wake of the feud, the market responded positively to this reconciliation, with CDL’s share price recovering slightly to $5.09 as of March 13. This was a welcome relief for stakeholders who had witnessed a concerning dip during the confrontation.

Prior to the mediation, Mr. Kwek Leng Beng had raised serious allegations against his son and other directors, asserting that their actions were an unauthorized power grab that had not received full consensus from the board. Compounding these issues, he had also attempted to install his nephew, Kwek Eik Sheng, as interim CEO, further complicating the family dynamic.

Despite these tensions, Sherman denied any intentions to oust his father, claiming the senior Kwek was misled by Dr. Wu, who purportedly participated in senior management discussions without the chairman's oversight.

Additionally, the chaotic environment within M&C may have been exacerbated by the recent departure of CEO Clarence Tan, who managed the company during a tumultuous time marked by the COVID-19 pandemic. His resignation after only four months in position has raised eyebrows about the internal strife and management challenges facing the company.

As the Kwek family looks to move forward, analysts stress that while the temporary truce brings a semblance of stability, fundamental governance issues that have plagued CDL must still be addressed. Investors are keen for greater transparency regarding the management’s strategies in maximizing shareholder returns and mitigating the risks of future governance crises.

Moreover, doubts linger about the decision-making process behind CDL’s ill-fated investment in Sincere Property, which resulted in a staggering $1.9 billion loss in 2020. One commentator raised questions over the lingering divisions on the board, pointing out discrepancies in voting and accountability that remain unresolved.

In a rapidly evolving market where corporate governance is under the microscope, the Kwek family must not only mend their internal rifts but also restore investor confidence, signaling a commitment to long-term sustainable practices as they navigate the future of CDL.