Singapore’s Richest Family Clashes Over China Property Expansion

The unity of the clan behind one of the most influential conglomerates broke when a family member quit CDL’s board

By Yoojung Lee
December 4, 2020, 2:00 AM GMT+8 Updated on December 4, 2020, 11:08 AM GMT+8

For decades, Singapore’s Kwek dynasty avoided family drama as it built Hong Leong Group into one of the world’s most influential conglomerates.

But now a rare moment of public discord is fuelling concerns that the close-knit clan will become distracted at a critical time for its sprawling empire.

The family’s unity broke suddenly in October when Kwek Leng Peck, a second-generation scion, quit the board of the group’s property business, citing disagreements over an investment in a Chinese real estate firm and management of a U.K.-based hotel group. The move has pitted one of the family’s most senior members against relatives including his cousin and nephew, who serve as the property unit’s executive chairman and group chief executive officer.


“I was shocked, especially when we’re talking about the Kwek family being one of the very prominent families in Singapore, in Asia,” said Yap Chee Wee, founder and chief executive officer of Fleur Capital, a wealth-management firm in the island-state that hasn’t invested in any Hong Leong Group companies. “The business has been run by the next generation for quite a while, so it’s unfortunate that such major disagreement has to happen.”


Kwek Hong Png
Source: National Archives of Singapore

At stake is the smooth functioning of a dynasty that’s worth $16.5 billion, according to this year’s Bloomberg Billionaires Index list of Asia’s richest clans. The Kweks are down $1.8 billion from a July 2019 ranking.

See the full list: Asia’s 20 Richest Families Control $463 Billion

The family traces its roots to China, which Kwek Hong Png left as a teenager to move to Singapore in the 1920s. After working at his brother-in-law’s hardware shop, he founded a trading company named Hong Leong Co. in 1941, which expanded into hotels, real estate, financial services and manufacturing, and branched out to Malaysia in 1963. 

The empire now employs 30,000 people and is the largest Asian-controlled hotel group outside of China, owning the St. Regis Singapore and JW Marriott Hong Kong.

Conflicts aren’t unusual among family businesses across the world. Bloomberg’s ranking of Asia’s 20 richest clans is led by the Ambanis, whose two brothers, Anil and Mukesh, feuded for years. 

But the potential for discord has increased in 2020 as many of the region’s wealthiest dynasties deal with the fallout from the coronavirus pandemic, while preparing to cede power to the next generation.

“Management boards distracted for reasons other than the core business is usually a recipe for underperformance,” said Priyaranjan Kumar, managing director at family office Alvarium Investments, referring generally to the impact of family feuds.

A spokesman for City Developments Ltd., the real estate firm at the center of the investments at issue, said even before his resignation, Kwek Leng Peck wasn’t involved in the day-to-day management of the company, adding that “CDL’s longevity and success are underpinned by a strong management team under Chairman Kwek Leng Beng, supported by an experienced board that is willing to embrace transformation and execute plans to deliver sustained shareholder value.”

Leng Peck didn’t respond to an interview request made through a company representative. CDL disputed a Business Times article saying that the discord could have an impact on the business.

Who’s Behind the Empire?

Kwek Leng Peck quit CDL’s board citing disagreements

Photographers: Courtesy of National Archives of Singapore, Ore Huiying/Bloomberg, company filing, Nicky Loh/Bloomberg

The resignation thrust Leng Peck, who had remained relatively low-profile despite working in the family business for decades, into the spotlight.

A trained accountant, he helped transform Hong Leong Asia Ltd. from a building-materials firm in the 1980s and 1990s into a player in the consumer-products and diesel-engine industries in China, a country where the company also encountered its fair share of challenges. 

He joined CDL’s board in 1987, about 15 years after Hong Leong Group bought a majority stake in the company. Leng Peck, 64, who remains executive director of a unit that holds the biggest stake in CDL, has been leading Hong Leong Asia as executive chairman since April 2017 and holds directorships in several Hong Leong Group companies, including Hong Leong Finance Ltd., a provider of banking services.


CDL is 49% controlled by the family, with most of the rest held by institutional investors. It’s led by group CEO Sherman Kwek, Leng Peck’s nephew and the son of Executive Chairman Kwek Leng Beng. The firm has become a core part of the conglomerate’s business since the early 1970s, soon after beginning a major push in the property sector. It started to increasingly expand in China, where it sees its next phase of growth, about a decade ago.

In May 2019, CDL agreed to inject S$1.1 billion ($821 million) into Sincere Property Group, a developer of residential, retail, office and hotel properties, for a 24% stake -- its largest single investment in the country at the time -- a move that would have drastically increased its presence in China to 20 cities from three, lifting the proportion of its portfolio allocation in the country to 15% from 9%. Sherman Kwek, who has known Sincere Property’s chairman and founder for 10 years, later thanked him “for giving CDL such a rare opportunity to scale up in China.”

Sherman Kwek
Photographer: Nicky Loh/Bloomberg

But the transaction wasn’t completed and almost a year later, CDL negotiated new terms for a joint controlling interest of about 51% for S$880 million with an option to buy a further 9% for S$160 million.

When the new deal was sealed via virtual conference, Sherman called it a “game-changing investment” to develop in one of CDL’s key overseas markets, adding that he was “very optimistic” about the cooperation between the two developers as “1+1 can be bigger than 2.” He also described it as “one of the most challenging investment cases in my career.”

Krishna Guha, a Jefferies Financial Group Inc. analyst, questioned in an April note whether CDL was “throwing good money after bad” given the deal’s execution delays and subsequent valuation discount. Still, the analyst kept a buy rating on CDL, citing potential growth in net asset value. The stock rose Friday, paring its loss for the year to 29%, compared with a 21% slide for an index tracking Singapore’s real estate developers.

CDL has already invested S$1.9 billion ($1.4 billion) in Sincere Property, surpassing the initially planned S$1.04 billion in April, according to a filing with the Singapore exchange and a company statement. The Chinese developer is seeking to sell homes faster to shore up its balance sheet following a business downturn. CDL might need to put more money into the investment, Bloomberg Intelligence analyst Kristy Hung said. Sincere Property didn’t respond to requests for comment.

City Developments has developed some of Sentosa Cove's iconic properties, such as the W Singapore and Quayside Isle.
Photographer: Nicky Loh/Bloomberg

That may have all been too much for Kwek Leng Peck. He quit his board roles citing “unresolved differences in opinion,” according to a filing with the Singapore bourse submitted in October that mentioned Sincere Property’s challenging financial position in light of the impact of Covid-19 and China’s property-cooling measures.

He also cited reservations about the company’s approach to subsidiary Millennium & Copthorne Hotels Ltd., which CDL took full control of last year. The operator of more than 145 hotels globally has been suffering from the coronavirus hit, and the group’s chief executive officer resigned this summer after less than four months on the job.


At the start of November, CDL hired Deloitte & Touche Financial Advisory Services Pte. to assist in reviewing the Sincere Property investment. The Singaporean company, which expects to report a loss for the fiscal year, said Deloitte concluded Sincere Property has good assets that can lead to further value.

Discord like the case at the Kweks can be harder to avoid as more people from extended families get involved in a business over generations, said Mak Yuen Teen, an associate professor of accounting at the National University of Singapore.

And “economic problems from the pandemic would have worsened such disagreements,” he said.​​​​​​