The largest publicly listed real estate development company in Singapore, City Developments, is facing a crisis as its billionaire chairman, Kwek Leng Beng, 84, accuses his son, the company's CEO, of attempting a coup on the board of directors. The dispute centers on control of a significant portion of the $18 billion family empire that spans various sectors including real estate development, hospitality, and finance.
Marleen Dieleman, a professor of family business at IMD Business School in Singapore, comments that generational succession is always complicated, but even more so when the company faces difficulties and the previous generation retains power. City Developments has hotel, office, and residential properties in 29 countries. Kwek Leng Beng bases his success on the legacy of his father, Kwek Hong Png, who after moving to Singapore in the 1920s built a family empire now worth around $4.6 billion.
The third-generation heir, 49-year-old Sherman Kwek, became CEO in 2018, seemingly achieving a smooth succession. However, his management has been marred by errors in China, such as the failed investment in Sincere Property Group. This decision resulted in significant losses for City Developments, exacerbated by the real estate crisis and the pandemic.
Kwek Leng Beng sought to remove his son early in February due to corporate governance errors. He filed a lawsuit against Sherman and other directors for alleged irregularities in the appointment of new board members. Despite the litigation, Sherman remains CEO until the board decides on his continuity.
The scandal generated surprise in the company, coinciding with the publication of unsatisfactory annual results. The lack of agreement on the board of directors led to the suspension of stock trading and the cancellation of scheduled activities. The Kwek family owns about 49% of City Developments and controls a diversified business empire that has faced challenges under Sherman’s leadership.
