Third CDL director resigns over company's Sincere investment

Former CDL independent non-executive director Tan Yee Peng was appointed to her position back in May 2014. PHOTO: CDL

SINGAPORE (THE BUSINESS TIMES) - A third director of City Developments Limited (CDL) has stepped down in recent months in relation to its investment in China-based real estate developer Sincere Property Group.

In a Singapore Exchange filing on Monday (Jan 4), CDL noted that independent non-executive director Tan Yee Peng "disagreed with the board and management about the handling of the investment after the acquisition".

Her resignation was effective Dec 30.

Ms Tan, 47, was appointed to her position back in May 2014. She also served as chairman of CDL's board sustainability committee and a member of the audit & risk committee, nominating committee and board committee.

Her resignation came shortly after independent non-executive director Koh Thiam Hock, 70, similarly resigned with immediate effect from Dec 28, after more than four years on the group's board.

CDL said then that Mr Koh believed it was "most appropriate for him to now step down as a director" having shared his observations, concerns and suggestions on the group's investment in Sincere.

Last October, CDL's former non-executive and non-independent director Kwek Leng Peck quit after more than 30 years in the role, in one of the most stunning corporate developments in the group's history.

Mr Kwek, is the cousin of Kwek Leng Beng, the billionaire executive chairman of CDL who also helms the Hong Leong group of companies, and the uncle of CDL's group chief executive Sherman Kwek.

At the time, Mr Kwek, 64, cited disagreements with the board over CDL's investment in Sincere, as well as its continuing provision of financial support to the Chinese property group. He also had reservations with the group's approach in managing its London-based wholly-owned unit Millennium & Copthorne Hotels, which he concurrently resigned from as a director.

CDL has appointed Philip Lee Jee Cheng to replace Ms Tan as independent non-executive director, after taking into consideration his credentials and experience, it said. Mr Lee, 60, will also take on the additional roles as member of the audit & risk committee, remuneration committee and nominating committee.

According to the group, Mr Lee has 35 years of experience in accounting and finance. He was admitted into the partnership of KPMG Singapore in 1995, where he served until his retirement in September 2018. Mr Lee was on the leadership team in KPMG Singapore and on the executive team at KPMG Asia Pacific. Other appointments he held at KPMG Singapore are head of real estate, head of an audit business unit and head of people.

His experience includes accounting and auditing, evaluation of controls and compliance, transaction services and assisting companies in preparing for and raising funds from capital markets, CDL noted on Monday. Currently, Mr Lee serves as a member of the governing council of Singapore Agro-Food Enterprises Federation.

"The board looks forward to Mr Lee's contribution of skills and diversity to the current core competencies of the board," CDL added.

Separately, CDL on Monday announced other changes to its board committees following Ms Tan's departure. Colin Ong has been appointed as member of the nominating committee, while Sherman Kwek has been appointed as chairman of the board sustainability committee. Meanwhile, Daniel Marie Ghislain Desbaillets has been appointed as a member of the board sustainability committee and a member of the board committee.

In a bourse filing on Oct 21, CDL noted that its investments in Sincere totalled about S$1.9 billion. These include a 51 per cent joint-venture equity investment in Sincere amounting to 4.4 billion yuan (S$896.8 million). It had also subscribed for US$230 million worth of bonds issued by Sincere, and provided a working capital loan of 650 million yuan.

The investments also include a 1.5 billion yuan liquidity-support undertaking provided by CDL for Sincere's bonds that matured on Oct 26, as well as a 1.5 billion yuan corporate guarantee in relation to an external bank loan obtained by Sincere.

Following Mr Kwek's resignation last year, the group appointed Deloitte & Touche Financial Advisory Services to conduct a review into its investment in Sincere. Deloitte subsequently "ascertained that there are good assets that the group can extract further value (from)", CDL said.

At 3.58pm on Monday, CDL shares were trading down 19 cents or 2.4 per cent at $7.78.

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