https://www.businesstimes.com.sg/companies-markets/sherman-kwek-cdl-board-rift-sparked-action-rein-catherine-wu-kwek-leng-bengs-adviser
Sherman Kwek: CDL board rift sparked by action to rein in Catherine Wu, Kwek Leng Beng’s adviser
Dr Wu, who is said to have a ‘long relationship’ with CDL executive chairman, is accused of interfering in matters well beyond her scope
THE “primary reason” for the ongoing dispute at City Developments Ltd (CDL) is “a very serious issue of corporate governance” involving Dr Catherine Wu, Kwek Leng Beng’s adviser, said group chief executive Sherman Kwek in a statement on Thursday (Feb 27) evening.
He cited Dr Wu as holding an official position as adviser to the board of Millennium & Copthorne Hotels (M&C), a wholly owned and principal subsidiary of CDL.
“(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,” he said.
Sherman Kwek added that Dr Wu has a “long relationship” with his father, CDL executive chairman Kwek Leng Beng, and that “efforts that were made to manage the situation were done sensitively, but to no avail”.
“(She) has been interfering in matters going well beyond her scope, and she wields and exercises enormous influence.”
“This led us, with the benefit of legal advice, to propose a resolution to terminate the advisory agreement Dr Wu has with the board of M&C,” he said.
Another resolution was to affirm that Dr Wu has no power and authority, among other things, to influence or advise the directors, management and staff of the CDL and M&C groups. Both resolutions were passed by a majority of the board on Feb 21.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
“We considered them to be necessary to protect the interests of the shareholders and relevant staff of the CDL Group, and to restore proper corporate governance and accountability,” said Sherman Kwek.
His statements are the latest salvo in the ongoing father-and-son tussle for the control of CDL.
The saga erupted on Feb 26, after Kwek Leng Beng said that he had filed court papers on Tuesday to deal with an “attempted coup” – by his son, board members Philip Lee Jee Cheng and Wong Ai Ai, as well as a group of directors acting with them.
In particular, the elder Kwek questioned the appointment of two new directors – Jennifer Duong Young and Wong Su Yen – that he alleged was done without due diligence and proper vetting.
According to Kwek Leng Beng, his son’s group had bypassed the nomination committee, contrary to corporate governance principles and the Singapore Exchange’s listing rules.
The elder Kwek issued a second statement at 11.34 pm on Feb 26, saying that after a court hearing that day, “the serious lapses of corporate governance at CDL (together with its subsidiaries) have now been halted”.
“The two new directors, irregularly and hastily appointed on Feb 7, by means of Directors’ Resolutions in Writing, have undertaken not to exercise any powers as directors until further notice of the court,” the second statement had said.
“Ambush”
In his Feb 27 statement, Sherman Kwek alleged that his father’s statements “sadly do not present the full picture” and that there “has been no attempt by us to oust the chairman”.
He said that his father and other minority directors – Philip Yeo, Colin Ong and Chong Yoon Chou – had tried to get the court to grant interim injunctions to restrain the “majority directors”, comprising six independent directors and himself.
The interim injunctions were also to restrain two independent directors from exercising powers as directors and to reverse a number of resolutions that had been passed by the majority directors on the board of CDL.
“It has not been disclosed that the minority directors… served five of us court papers just after noon on Feb 26 for a hearing that was held only two-and-a-half hours later,” Sherman Kwek said in the statement.
The CEO also said that his father’s second statement – suggesting that the minority directors succeeded in their application and that lapses of corporate governance have been halted – was “most unfortunate”.
In fact, he said, the minority directors had failed in their application to reverse the resolutions that were passed.
“What in fact happened was that because the majority directors did not have the opportunity to present our case, we voluntarily offered undertakings, as defendants often do in such urgent applications, to preserve the status quo until a full hearing where we would have that opportunity,” said Sherman Kwek.
“As a result, the court recorded our undertakings that we would not take any further action for the time being in relation to a number of the resolutions that had been passed, and undertakings from two independent directors that they would not for the time being exercise powers as directors of CDL,” he added.
Sherman Kwek said that the court “made it a point to say it was not making any substantive orders on the minority directors’ application”, adding that this detail was not in his father’s second statement.
“Nor was there any mention by the chairman of the fact that the lawyers for the minority directors were questioned by the court about whether they had been validly appointed by CDL, leading them to say that they would ‘leave out CDL’ for the hearing,” said the CEO.
Sherman Kwek added that “it was we who asked for the full hearing to be held early, and that the court agreed”.
“(Despite) the attempt to ambush us, the minority directors did not succeed in persuading the court to hear and decide the merits, and in fact ended up on the receiving end of directions themselves and unable to use CDL’s name at the hearing,” he said.
Sherman Kwek and the six directors in his group have appointed a legal team led by Julian Tay of Lee & Lee. The six directors are Lee, Wong Ai Ai, Daniel Desbaillets, Carolina Chan, Wong Su Yen and Young.
CDL, Kwek Leng Beng, and three other directors – Yeo, Ong and Chong – are represented by Senior Counsel Lok Vi Ming of his own firm LVM Law Chambers.
Dr Wu is said to have been a personal assistant to Kwek Leng Beng, according to a 2018 employment tribunal document filed in London. The document said that she was paid directly by the elder Kwek.
CDL shares have been under a trading halt since Feb 26.
-With additional reporting by Tay Peck Gek
Comments
Post a Comment