SINGAPORE – A high-stakes power struggle within the Kwek family over control of City Developments Limited (CDL) has come to a head, with executive chairman Kwek Leng Beng publicly criticizing his son Sherman, the company’s group chief executive officer. The feud, which surfaced on February 26, has thrown a spotlight on internal governance issues and family dynamics within one of Singapore’s largest property developers.

The tension between the senior Kweks and Sherman Kwek escalated when the older Kwek filed court papers alleging an “attempted coup” by Sherman and other board members. “This is necessary to deal with this attempted coup at the board level and restore corporate integrity,” said Kwek Leng Beng, who will turn 84 in 2025. He emphasized his commitment to exploring all legal options to protect CDL and its shareholders, while hinting at a future leadership change.

Disagreements and Governance Concerns

Responding to the allegations, Sherman Kwek, 49, expressed disappointment over his father’s actions, which he deemed extreme. Sherman Kwek, in a statement on behalf of the majority of the CDL board, said, “It is incredibly disappointing that our chairman and a minority of the CDL board have decided to take these extreme actions regarding this disagreement around the size and make-up of the CDL board.”

The younger Kwek also emphasized that the dispute was not about removing his father from his role.

A Series of Claimed Irregularities

The feud is rooted in internal disagreements over the governance structure of CDL. Kwek Leng Beng revealed a series of actions by Sherman and his allies, including the appointment of new directors without following proper procedures. He claimed that Chairman Kwek’s group had bypassed the nomination committee on two occasions, and quickly followed this by making significant changes to board committees and governance structures.

The elder Kwek allege the “serious lapses of corporate governance has been halted”. This followed a closed-door court hearing earlier in the day.

The Tactics and Countermeasures

The complexities of the situation unfolded quickly. On February 26, the older Kwek cited a decision that halted immediate use of two directors’ powers. He added, Mr Sherman Kwek, Mr Lee, Ms. Wong, and others have agreed not to take any more steps to change CDL’s board committees or the management of certain subsidiaries until the Singapore court orders otherwise. He also mentioned that the nominating and remuneration committee, charged with overseeing board appointments, was suspended from taking further actions. In other words, the board committees and the management of the relevant subsidiaries are now safe from further attempts to destabilize, dismantle, and reconstitute them, he declared.

A Patterns of Disputts

The elder Kwek asserted this was not the first incident where his son’s decisions have put CDL in a precarious position. He highlighted a 2020 incident involving a $1.9 billion loss after Sino-Realty property incident and a nearly 94% drop in profit during the first half of 2023 due to investments in the UK property market.

Additionally, the weaker performance of CDL’s stock since Sherman took the leadership role in 2018 has led to “eroded investor confidence and shareholder concerns over strategic missteps,” according to Kwek Leng Beng.

Despite holding a majority stake in CDL, Kwek Leng Beng acknowledged the difficulty of his decisions. As a father, firing my son was certainly not an easy decision. I accept that business decisions are difficult and young people may make business mistakes in their careers and that is understandable, but circumventing corporate governance laws is a red line. he said.

In a further escalation, Kwek Leng Beng disclosed a major strategic decision: dismantling the current nominating committee (NC) and replacing it with a new committee in a “calculated effort to sideline independent oversight and give the majority bloc unrestricted control over CDL’s leadership and decision-making.”

Such a reorganization, he argued, could then remove the independent powers granted through the nominating committee and allow Sherman and his allies to have full control over the election and removal of board members. Ultimately, even Kwek Leng Beng’s role would be gutted.

Anticipating the next phases of this complex drama, it remains unclear how much external support Sherman Kwek and his allies might have, and whether the legal challenges could draw out for months or even years. Previous family business conflicts provide relevant case study material, such as the high-profile Battle between two of the world’s wealthiest families: Google co-founder Larry Page and his chief rivals, AstraZeneca over $100 to 400 billion, in part teasing at how family feuds can escalate to epic proportions despite their $4.7 billion coffers.

Erosions of Corporate Stability

The corporate governance saga within CDL highlights the inherent challenges of balancing family interests with corporate responsibilities. Observers note that such disputes are not uncommon, especially in family-run businesses where personal and professional interests often intertwine.

The recent family feud of Twitter delineates the challenges of balancing power between public shareholders, insider shareholders, and tech innovations.

Conclusion

The feud between Kwek Leng Beng and Sherman Kwek represents a broader issue within corporate governance and family businesses. Concerns now focus on the potential destabilization of CDL, one of Singapore’s largest property developers, and the broader implications for other family-owned enterprises. As the conflict unfolds, it serves as a cautionary tale for businesses grappling with succession planning and governance issues.

The image spotlights a peculiar coalition between father and son, highly respected, leading to the company’s 60th anniversary in 2023, highlighting a larger narrative of family business struggles within the broader story it has shared

The saga continues with stakeholders and international accounting analysts numb over the information, which you can find out in my upcoming book Money Eyes

This article explores the high-profile family feud within the Kwek family over control of City Developments Limited (CDL), focusing on the legal, governance, and personal dynamics involved.

What led to the power struggle within the Kwek family over CDL?

The feud emerged when Kwek Leng Beng, the executive chairman, accused his son Sherman Kwek of orchestrating a “boardroom coup” as CDL’s group CEO. This situation highlighted internal governance issues and family dynamics within one of singapore’s leading property developers. According to news sources, the tensions surfaced publicly on February 26, 2025, after the release of CDL’s 2024 financial results [[1]] [[2]].

What are the key disagreements between Kwek Leng Beng and Sherman Kwek?

The key disagreements centre around governance structure and board composition at CDL.Kwek Leng Beng alleges that Sherman and his allies bypassed procedural norms in appointing board members and altering governance structures. This, he claims, constituted serious lapses in corporate governance.on the other hand, Sherman Kwek termed his father’s actions as “extreme” and clarified that the dispute was not about removing his father from his current role [[3]].

What steps have been taken to address the conflict?

Kwek Leng Beng has pursued legal action, alleging the “attempted coup” and seeking a court intervention to halt the changes made by Sherman Kwek and his allies. temporary measures were implemented, such as suspending the powers of certain directors and board committees to prevent further destabilization, pending court verdicts on these matters [[3]].

What implications does this feud have for CDL and other family-run businesses?

This internal conflict underscores the challenges of balancing familial relationships with corporate governance and succession planning. For CDL, it raises concerns about potential destabilization and a loss of investor confidence. It serves as a cautionary tale for other family-owned enterprises about the importance of clear governance structures and succession planning. Such disputes are not uncommon in family-run businesses and can have lasting impacts on corporate stability [[2]].

what historical precedents are related to this kind of family business conflict?

Family business conflicts, like the one between the Kweks, are historically notable. High-profile cases such as disputes within tech giants and other major family-run enterprises highlight how these feuds can escalate. They reveal the delicate balance between family interests and corporate responsibilities.Learning from such case studies, including the noted conflicts within families like Warren Buffett’s, can provide valuable insights into managing potential disputes [[3]].

How might this situation effect the future leadership of CDL?

The outcome of this conflict could substantially impact the leadership dynamics at CDL. Kwek Leng Beng’s commitment to restore corporate integrity and his considerations of a future leadership change suggest a potential reconfiguration of the company’s leadership. This scenario highlights the importance of robust succession planning and the potential challenges in leadership transitions within family-run businesses [[1]].

What can stakeholders learn from this feud?

• Importance of Governance: Clear governance frameworks are essential to prevent internal disputes.
• Sucession Planning: Family businesses must have formal succession plans to ensure smooth leadership transitions.
• Stakeholder Communication:** Clear communication with stakeholders can definitely help maintain their confidence during conflicts.