An alleged boardroom coup attempt, a lawsuit between a family patriarch and his son, and accusations of corporate governance lapses – even by the standards of Asian succession drama, the family feud raging at Singapore’s Kwek dynasty stands out.
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City Developments Limited (CDL), the financial hub’s biggest listed developer, plunged into crisis on Wednesday when its billionaire chairman Kwek Leng Beng, 84, accused his son, the firm’s chief executive officer, of orchestrating a boardroom coup. He and CDL filed a lawsuit against the younger Kwek.
At stake is control of a major slice of an US$18 billion family empire spanning property development to hospitality and finance. It’s also raised eyebrows in a region all too familiar with succession battles that often erupt into public view and occasionally wind up in court. Former casino baron Stanley Ho, property tycoon Lo Ying Shek, and the removal of New World Development Co.’s scion CEO in Hong Kong are just a few examples.
“Generational succession is always tricky, but even more so if the business experiences headwinds and the previous generation retains a position of power,” said Marleen Dieleman, professor of family business at IMD Business School in Singapore. “The events at CDL today point to chaos.”
The public kerfuffle caught the developer’s management by surprise on the same day it released annual results that missed estimates. The company abruptly cancelled its press briefing and halted trading of its shares in light of the board disagreement. The firm’s market value is hovering at about a third of its 2007 peak, or about S$4.6 billion (US$3.4 billion).
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Kwek Leng Beng spent six decades building up the business after taking control of the loss-making CDL together with his father and brother. They later turned Millennium & Copthorne Hotels into Singapore’s largest international hotel group and one of the largest operators in the world. CDL has hotel, office and residential properties across 29 countries, according to its website.