SIAS Questions to CDL

Date: March 6, 2025

To: Chairman and members of the board

Cc GCEO and GCOO
City Developments Limited (CDL)

Background:
On 26 February 2025, CDL called for a trading halt following the announcement of its FY2024 results. Subsequently, the company disclosed a board conflict concerning the composition and constitution of the board and its committees. The company assured shareholders that business operations remain fully functional and that incumbent executive leaders continue in their roles until further notice.

On 3 March 2025, CDL announced that certain directors — Mr. Kwek Leng Beng (executive chairman), Mr. Philip Yeo Liat Kok (non-independent non-executive director), Mr. Ong Lian Jin Colin (independent director) and Mr. Chong Yoon Chou (independent director) — filed an originating application before the High Court of Singapore seeking specific orders and an interim injunction. The company also acknowledged media reports on various allegations, but has stated that it will not comment on their validity, The company committed to updating shareholders on any material developments.

SIAS has received numerous queries from shareholders regarding these developments. In the interest of transparency and good corporate governance, SIAS seeks the board’s responses to the following questions:

News reports
Multiple media reports have surfaced detailing statements made by Mr Kwek Leng Beng, Mr Sherman Kwek (executive director and group chief executive officer (GCEO)) and Mr Philip Yeo. In addition, the resignation of the independent adviser to the board of Millennium & Copthorne Hotels (a CDL subsidiary) was reported by the media rather than through SGXNet.

Q1. Would all directors commit to making all statements related to the current situation on SGXNet first? This would also ensure that any statements and disclosure made by the directors comply with SGX listing rules, and that no material information is selectively disclosed to any parties. Directors making individual statements should provide personal attestations or sign-offs for greater accountability.

Appointment of new directors – Ms Jennifer Duong Young and Ms Wong Su-Yen

Q2. What was the actual process for identifying and appointing the two newly appointed directors? Can the company clarify whom the two newly appointed directors met and spoke with prior to their appointment during the search and nomination process? Given that they are not first-time directors, can the two directors let shareholders know if they had requested to meet the nominating committee as part of a formal and transparent appointment process? Do the two directors believe that their nomination and appointment adhered to best corporate governance practices?

Board effectiveness
Q3. Given that there is an apparent split in the board, how can shareholders be assured that the board remains effective and stay aligned on the business goals?

Senior management structure and decision-making
Mr Kwek Eik Sheng was appointed as the group chief operating officer (GCOO) in January 2022.
Q4. What are the reporting lines for the GCEO and GCOO? How does the board ensure cohesive leadership and effective decision-making during this period? What key performance indicators are in place to assess the performance of the GCEO and GCOO? How are key decisions made and approved during this period?

Business performance – Singapore
In the FY2024 results presentation, management highlighted strong residential sales performance in Singapore, with the group garnering a 19% market share.
Q5a. Can management elaborate on its plans for Union Square Residences, where only 31% of units have been sold? Is this performance in line with management’s expectations? What strategies are in place to improve sales and mitigate risks, particularly given the government’s indication that it is “not averse” to introducing further cooling measures?
Q5b. Are the launches of Zion Road (Parcel A) and Newport Residences proceeding as planned?

Strategic direction and shareholder value
Q6. Is the board reviewing the group’s strategic direction given that the share price of CDL has underperformed the market? Has the board introduced any interim or temporary measures during this period to safeguard shareholder value?

Takeover of Millennium & Copthorne Hotels New Zealand (MCK)
The group recently made an offer of $2.25 per share for MCK, which has been rebuffed by the directors of MCK.
Q7. Given the ongoing board dispute, how is the board ensuring sufficient focus on this transaction? What is the strategic value of the proposed privatisation of MCK?

Specifically with regards to the current board dispute, SIAS would like to seek clarity on the governance framework currently in place especially with regards to director nomination, selection and appointment.

Independent adviser to the board of Millennium & Copthorne Hotels (M&C)

Q8. What were the roles of Dr Catherine Wu as a director on the board of M&C from June 2022 to January 2024? Was her appointment approved by the Board? Was her performance assessed by the M&C board, and if so, what were the findings? What were the reason(s) for her cessation from the M&C board? Was there a rigorous search and nomination process for the role of an independent adviser to the board of M&C, and what were the key deliverables and responsibilities for this role? Is there a replacement for this position? If so, who will oversee the selection process and appointment?

Professional costs
Q9. Who is covering the costs of the legal advisors and lawyers engaged by the directors?

SIAS would sincerely appreciate the board’s timely responses to these queries, which will provide much-needed transparency and assurance to shareholders and stakeholders.

Sincerely,
David Gerald
Founder, President & CEO
SIAS

 

Note: SIAS would like to clarify that the queries and concerns articulated in this email/letter originate exclusively from SIAS as the result of its own independent research based on public information and without any influence, solicitation, or intervention from external parties. The questions have also undergone review and clearance by the SIAS Management Committee, in accordance with established governance protocols.