City Developments (CDL) executive chairman Kwek Leng Beng has come out to defend recent appointments to the board and reassure investors after an exodus of directors put the spotlight on bitter internal divisions over the group's investment in Chinese real estate developer Sincere Property Group.
In a letter to the media on Wednesday, Mr Kwek said the departures of several directors "offer CDL an opportunity to renew its board bench" as the new independent non-executive directors bring "diversified skill sets and perspectives".
The developer announced on Monday that it had set up a special working group to improve the liquidity and profitability of its investment in Sincere Property following the resignations of three directors. These include the shock resignation last October of Mr Kwek Leng Peck, a longstanding director and cousin of Mr Kwek Leng Beng.
Mr Kwek Leng Peck cited "disagreements with management in relation to the group's investment in Sincere Property and its continuing provision of financial support to Sincere". CDL noted in a bourse filing last October that Sincere's liquidity position was challenging, having been severely impacted by the Covid-19 pandemic and property cooling measures in China.
Disagreement over CDL's investment in Sincere was also cited for the resignations of two independent non-executive directors - Mr Koh Thiam Hock on Dec 28, and Ms Tan Yee Peng on Dec 30.
CDL said on Monday that it aims to limit any additional financial exposure to the China-based real estate group, and will review potential divestments of Sincere's assets and restructuring of its liabilities.
Mr Kwek Leng Beng said in his letter that CDL's investment in Sincere Property "must be viewed against the backdrop of a fast-changing business environment, made even more challenging by the global pandemic".
He said that having sat on various Hong Leong Group boards for over 40 years and served as CDL's executive chairman since 1995, he believes he has "sufficient experience to assess what makes a successful board".
"When the management presents a business strategy, the board should ask tough questions and raise concerns openly and robustly. Recommendations and constructive advice can be made to refine the strategy. But once a collective decision is made... a director, who may have disagreed, should support its successful implementation," Mr Kwek said.
He said the new non-executive and independent directors bring "different industry experience at senior levels".
Mr Colin Ong, a financial services industry veteran with over 28 years of experience, will help in CDL's digital transformation and expansion of online sales channels for its hospitality divisions. Mr Daniel Desbaillets is a hospitality veteran with over 40 years' experience, while Mr Chong Yoon Chou, an international fund manager who has managed assets of over US$80 billion (S$106 billion), has a vast network of private and institutional investors.
Ms Carol Fong, who is chief executive of CGS-CIMB Securities, has extensive experience in capital markets, and Mr Philip Lee is a chartered accountant with 35 years of accounting, audit and finance experience, including 23 years at KPMG in senior roles in audit, HR and advisory.
"With such deep expertise and networks, these directors, together with existing directors, will refresh the board and board committees," Mr Kwek said.