Key takeaways:

• The Kwek family feud over City Developments Limited (CDL) intensifies with a lawsuit filed by Kwek Leng Beng against his son, Sherman Kwek.
• Allegations of a boardroom coup and governance lapses have raised concerns among stakeholders, impacting CDL's share price and market confidence.
• Sherman Kwek claims internal conflicts stem from a board advisor's influence, while critics highlight governance violations associated with recent board appointments.

The ongoing feud within Singapore's prominent Kwek family has escalated into a public power struggle at City Developments Limited (CDL), one of Singapore's largest property developers, valued at around US$18 billion. The family drama centers on allegations of governance lapses and an attempted boardroom "coup" involving Kwek Leng Beng, the company’s executive chairman, and his son, Sherman Kwek, who serves as the group CEO.

Kwek Leng Beng, 84, has accused Sherman and several other board members of attempting to orchestrate a takeover by nominating two new independent directors without the necessary approvals from the company's nomination committee. Concerns were heightened when CDL's shares were suspended amidst this conflict, marking a significant moment in corporate governance discourse.

The power struggle emerged publicly following a series of accusations and legal actions initiated by Kwek Leng Beng, who stated that his son’s leadership has led to substantial financial losses, particularly citing a S$1.9 billion gamble on Chinese developer Sincere Property and issues in the UK property market. In a testament to the gravity of their dispute, Kwek Leng Beng characterized his son’s conduct as an attempted coup while emphasizing the importance of corporate integrity.

In response, Sherman Kwek has strongly denied the coup allegations, asserting in statements that there has been no attempt to undermine the chairman. He pointed to board advisor Dr. Catherine Wu, a longtime associate of his father, as a significant source of discord within the organization, claiming her influence was detrimental to proper governance.

Reflecting on the internal disagreements, Sherman Kwek detailed how resolutions were passed to terminate Dr. Wu's advisory position, which he believes is critical for restoring governance and accountability at CDL. Following these developments, Philip Yeo, one of the minority directors and allies of Kwek Leng Beng, criticized Sherman Kwek's moves as diversions from larger issues, urging him to focus on recovering shareholder losses.

The confrontation also draws parallels to dramatic corporate succession stories, as the strife evokes memories of soap opera-like family dramas found in shows such as HBO's "Succession." As both factions continue to publicly express their grievances, acknowledging the tensions within such prominent family businesses raises questions on investment reliability and the future of CDL.

The latest court hearing ended with a temporary agreement that halted further actions from both parties regarding board committee structures, thus maintaining the status quo until further developments unfold, emphasizing the need for a clearer governance structure within the company.

It remains to be seen how this saga impacts CDL’s reputation long-term, particularly as stakeholders keep a close eye on how the situation resolves and the principles of corporate governance are upheld in the turbulent waters of family business dynamics.

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