CDL’s future under scrutiny; HPH Trust jumps after CK Hutchison sells port assets to US

SINGAPORE - The tussle for control of City Developments Limited (CDL) between executive chairman Kwek Leng Beng and his son, group CEO Sherman Kwek, continued to play out last week.

Observers and analysts are now suggesting that it might be time for CDL to professionalise its board and appoint non-family members to lead the company in the best interests of shareholders.

However, with the wider Kwek clan holding 49 per cent in CDL through various investment vehicles such as Hong Leong Investment Holdings, the family’s influence will likely continue to shape the company’s future.

The latest development in the saga was

the resignation of Dr Catherine Wu as unpaid, independent adviser

at CDL subsidiary Millennium & Copthorne Hotels, a post she had held since August 2024, according to Mr Kwek Leng Beng’s press statement on March 5.

Dr Wu first came into the spotlight after

Mr Sherman Kwek alleged that the primary reason for the dispute with his father is Dr Wu,

who had been “interfering in matters going well beyond her scope” at the company.

This was in response to Mr Kwek Leng Beng’s

initial allegation on Feb 26

that Mr Sherman Kwek and four directors acting with him had bypassed the nomination committee, appointed two independent directors against legal advice, and restructured key committees to oust him as executive chairman in an “attempted coup”.

He also called for the removal of Mr Sherman Kwek as group CEO.

Court papers were filed to address these issues and both sides have appointed lawyers. Mr Sherman Kwek has roped in Senior Counsel Davinder Singh to represent him, while his father has hired LVM Law Chambers, helmed by Senior Counsel Lok Vi Ming. 

The case is ongoing.

Shares of CDL, which resumed trading on March 3, closed the week at $5.03, up by more than 4 per cent. The shares had initially fallen but rose after Mr Kwek Leng Beng in his March 5 statement called for the restoration of investor confidence in the company now that Dr Wu has resigned.

Still, CDL’s shares have lost more than 12 per cent of their value in the past year, while its recent results report showed a decline in 2024 earnings.

HPH Trust on the move

Units of HPH Trust jumped by more than 11.5 per cent to close the week at 18 US cents after its substantial unit holder, CK Hutchison, said on March 4 that it is selling its 90 per cent stake in Panama Ports Company, which operates the Balboa and Cristobal ports in Panama.

The company, owned by Hong Kong billionaire Li Ka Shing, will also offload its 80 per cent controlling interest in subsidiaries and associated companies that own, operate and develop 43 ports across 23 countries, excluding China.

The assets will be sold to US fund manager BlackRock for cash proceeds totalling US$19 billion (S$25.3 billion), CK Hutchison said in a statement.

The sale comes after

complaints by US President Donald Trump that China controls the Panama Canal,

which he said is a vital strategic asset that the US once ran. “To further enhance our national security, my administration will be reclaiming the Panama Canal, and we’ve already started doing it,” Mr Trump said in a speech to Congress on March 4. “We’re taking it back.”

But the sale does not include any interests in Singapore-listed HPH Trust, which runs the company’s ports in Hong Kong, Shenzhen and South China, or any other ports in China.

When contacted, a spokesperson for HPH Trust told The Straits Times that CK Hutchison remains a substantial unit holder with a 30.1 per cent interest in the trust.

“No changes in port operations and business, including sponsorship from CK Hutchison, are expected on HPH Trust,” the spokesperson said.

HPH Trust, which announced its 2024 results in February, warned then that expectations of a US economic slowdown are rising, with consumer confidence falling in December 2024 amid uncertainty over Mr Trump’s policies. Additional tariffs on imports and high inventory levels in the US and European Union are also likely to dampen demand for Chinese products, it said.

UOI’s minority investors take action

In a March 3 statement filed on the Singapore Exchange, United Overseas Insurance (UOI) confirmed that it had received notice from several minority shareholders to table resolutions at its annual general meeting (AGM) in April.

The two resolutions, according to former remisier Ong Chin Woo, are for UOI to distribute around 4.3 million shares in Haw Par Corporation to its shareholders, and to appoint a financial adviser to evaluate options for unlocking more value for UOI shareholders.

Mr Ong claims to represent a group of minority shareholders collectively holding a 4.5 per cent stake in UOI. Their notice, seen by ST, was sent to UOI on Feb 28.

Mr Ong noted that UOI can do more to reward long-term shareholders, given its strong cash and investment portfolio, without negatively impacting its growth prospects and financial position, as well as other stakeholders.

By his calculations, the 4.3 million Haw Par shares UOI owns represents 27.7 per cent of the insurance provider’s equity investments. “This investment concentration implies higher risks. Distributing those shares can help mitigate the risks by ensuring UOI’s excess capital is properly utilised, while also unlocking fairer shareholder returns for minority investors,” Mr Ong told ST in an interview.

Both UOI and Tiger Balm maker Haw Par are controlled by the Wees, the family behind UOB Bank and property developer UOL. UOB Bank also holds 58 per cent in UOI and 9.8 per cent in Haw Par. Haw Par, in turn, owns 2.8 per cent in UOB and 8.5 per cent in UOL, according to available data.

In its March 3 statement, UOI said it welcomes “constructive suggestions from shareholders”, and is reviewing the matter. Its CEO later told the media that shareholder requests and questions will be addressed at its AGM in April.

Asked if he believes the resolutions will be tabled and voted on at UOI’s AGM, Mr Ong said chances are low given Haw Par’s strategic value to the Wees, but said that “minority shareholders must do something to kickstart a proper discussion for fair and reasonable action and to extract shareholder value”.

He is contacting other shareholders, including UOB, to seek support for the resolutions.

Mr Ong is the same minority investor who is among those resisting an offer by OCBC Bank to buy their shares in Great Eastern at $25.60 per share, as part of efforts to take the insurance provider private.

Shares of UOI closed the week flat at $7.54, below their net asset value (NAV) of $7.66 per share as at Dec 31, 2024. This is the total value of the company’s assets after subtracting its debts.

Meanwhile, Haw Par rose by almost 2 per cent to close the week at $12.96. Its NAV is $18.74 per share.

What to look out for this week

Singapore Post will hold an extraordinary general meeting in hybrid form at 3.30pm on March 13 to seek shareholders’ approval to sell its Australian logistics business, Freight Management Holdings (FMH), for A$775.9 million. (S$650 million).

The move is expected to yield an anticipated special dividend and substantially improve the company’s financial position. But given that FMH is a major contributor to SingPost’s overall profits, a sale would also raise questions about the firm’s long-term growth potential.

Several companies under the Jardine group will report 2024 results this week. These include Jardine Matheson and DFI Retail Group, which operates the Giant, Cold Storage and 7-Eleven brands in Singapore. Both will release their results on March 10.

Markets could see more volatility this week. US stocks tumbled last week following a slew of new tariff measures announced by Mr Trump.

US inflation numbers for the month of February are due on March 12 and data on producer price changes on March 13. Federal Reserve chairman Jerome Powell has said it needs to see “real progress” on inflation or some labour-market weakness to consider adjusting rates again.