Sherman Kwek And Family Patriarch End Legal Battle, Signal Renewed Focus On CDL's Debt Restructuring

The prolonged dispute between legendary property developer Kwek Leng Beng and his son Sherman Kwek has finally reached resolution, marking a pivotal moment for City Developments Ltd., one of Asia’s most prominent real estate firms. The 84-year-old founder initiated legal proceedings against his 49-year-old son, who serves as chief executive officer, over governance concerns regarding board director appointments. The allegations specifically pointed to Sherman’s appointment of two board members without proper vetting through the company’s nominations committee.

Market Turmoil and Swift Recovery

The court case created significant investor uncertainty, with CDL’s share price plummeting to levels not seen in more than 20 years. However, the situation took a dramatic turn when Kwek Leng Beng withdrew the lawsuit, signaling an end to the family power struggle. During a joint August earnings presentation, both father and son demonstrated their commitment to moving forward, with the patriarch stating: “We have put past issues behind us, emerging stronger and more unified.”

This gesture of reconciliation coincided with tangible improvements in the company’s financial position. CDL shares recovered substantially as the market regained confidence in the organization’s leadership stability.

Strategic Asset Sales Reshape Balance Sheet

The company is aggressively tackling its S$13 billion ($10 billion) debt burden through a carefully orchestrated divestment program. A major transaction closed in June when CDL agreed to divest its 50.1% controlling stake in South Beach, a prominent mixed-use complex in Singapore’s central business district, to IOI Properties for S$834 million. IOI Properties is controlled by Malaysian billionaires Lee Yeow Chor and Lee Yeow Seng, who served as project co-developers.

Sherman Kwek revealed during earnings discussions that this represents merely the beginning of a broader portfolio optimization strategy. “There’s a pipeline of more divestments to come,” he indicated, suggesting that additional asset sales will continue to strengthen the company’s financial position and reduce leverage in the coming months.