2021-03-04
The corporate governance issues at City Developments (CDL) have been resolved, as stated by the executive chairman of CDL, Kwek Leng Beng. At a court hearing on Feb 26, the two new directors who were hastily appointed on Feb 7 have agreed not to exercise any powers as directors until further notice. These directors are Jennifer Duong Young and Wong Su Yen, who were appointed as independent non-executive directors through written resolutions by the directors.
Kwek also mentions that his son, Sherman Kwek, Philip Lee, Wong Ai Ai, and the other directors who acted with them, have agreed not to take further action towards their attempts to change the board committees and management of certain subsidiaries of CDL, until the court gives further notice. The nominating and remuneration committee, which was not properly constituted, has also been suspended from taking any further action.
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With this, the board committees and management of the relevant subsidiaries are now safe from any further attempts to destabilize, dismantle, and reconstitute them, according to Kwek. He also emphasizes the importance of strong corporate governance in a business, as it ensures transparency, accountability, and responsible decision-making, which are crucial for maintaining investor confidence and protecting the long-term interests of shareholders.
On the morning of Feb 26, CDL surprised the markets by calling for a trading halt and canceling its FY2020 results briefing at the last minute. In a statement released at 1.51pm, CDL stated that the trading halt was due to a disagreement within the board regarding the composition and constitution of the board and board committees.
Despite the temporary suspension, the business operations of CDL remain unaffected, and Sherman Kwek remains the group CEO until there is a board resolution to change company leadership. In his first press statement, Kwek stated that his son, Lee, Wong, and a group of directors were trying to consolidate control of the board and the group. He also mentioned that he had filed court papers on Feb 25 to address the attempted coup, and that they will continue to explore all legal options to defend and protect the interests of CDL and its shareholders.
Shares of CDL last traded at $5.12 before the trading halt on Feb 26.