Change - Announcement of Cessation::Resignation of Non-Executive and Non-Independent Director

Issuer & Securities

Issuer/ Manager
Stapled Security

Announcement Details

Announcement Title
Change - Announcement of Cessation
Date &Time of Broadcast
21-Oct-2020 12:25:02
Announcement Sub Title
Resignation of Non-Executive and Non-Independent Director
Announcement Reference
Submitted By (Co./ Ind. Name)
Enid Ling Peek Fong
Company Secretary
Description (Please provide a detailed description of the event in the box below)
Resignation of Mr Kwek Leng Peck as a Non-Executive and Non-Independent Director of City Developments Limited

Additional Details

Name Of Person
Kwek Leng Peck
Is effective date of cessation known?
If yes, please provide the date
Detailed Reason (s) for cessation
Based on his letter of resignation, Mr Kwek's primary reasons for his resignation are (i) that there are disagreements with the Board and management in relation to the Group's investment in Sincere Property Group ("Sincere") as well as its continuing provision of financial support to Sincere; and (ii) his reservations with the Group's approach in the management of Millennium & Copthorne Hotels Limited.
Are there any unresolved differences in opinion on material matters between the person and the board of directors, including matters which would have a material impact on the group or its financial reporting?
If Yes, Please provide full details
The Group's total investment in Sincere includes a 51% joint venture equity investment in Sincere of RMB 4.4 billion, US$230 million subscription of bonds issued by Sincere and a working capital loan of RMB 650 million. In addition, the Group also provided a liquidity support undertaking totalling RMB 1.5 billion relating to the bonds issued by Sincere that are maturing on 26 October 2020 and a RMB 1.5 billion corporate guarantee in relation to an external bank loan obtained by Sincere. The total of these investments is $1.9 billion.

The liquidity position at Sincere is challenging, being severely impacted by the COVID-19 pandemic and the property cooling measures which caused the further tightening of liquidity for real estate companies in China, the most recent being China's Three Red Lines. The intended asset divestment plan for some of Sincere's retail, hospitality, office and business parks assets, to lighten its debt load on investment properties exposure and to shore up its residential development plans as a key strategy to transform this platform, is now expected to take place over a longer period of time due to the current climate.

The Group is in the process of identifying and appointing an External Financial Advisor to assist with further evaluation and review of the Group's investment in Sincere. The impact on the Group or its financial reporting will be prepared and calibrated together with the External Financial Advisor.

M&C is a wholly-owned subsidiary of CDL which owns, manages and operates over 145 hotels globally. Listed on the London Stock Exchange in 1996, M&C was delisted on 11 October 2019 following a successful privatisation exercise launched by CDL.

2020 has been a difficult year for the hospitality and tourism sector. In 1H 2020, the Group's hotel operations segment recorded a substantial pre-tax loss of $208.2 million, which included $33.9 million of impairment losses made in view of the current pandemic.
Is there any matter in relation to the cessation that needs to be brought to the attention of the shareholders of the listed issuer?
If Yes, Please provide full details
Please see above
Any other relevant information to be provided to shareholders of the listed issuer?
Date of Appointment to current position
Does the AC have a minimum of 3 members (taking into account this cessation)?
Number of Independent Directors currently resident in Singapore (taking into account this cessation)
Number of cessations of appointments specified in Listing Rule 704 (7) or Catalist Rule 704 (6) over the past 12 months
Job Title (e.g. Lead ID, AC Chairman, AC Member etc.)
Non-Executive and Non-Independent Director and Member of the Board Committee
Role and responsibilities
As above
Familial relationship with any director and/ or substantial shareholder of the listed issuer or of any of its principal subsidiaries
Cousin of the Executive Chairman, Mr Kwek Leng Beng, and uncle of Mr Sherman Kwek Eik Tse, Executive Director and Group Chief Executive Officer.

A Director of Hong Realty (Private) Limited, Hong Leong Holdings Limited and Hong Leong Investment Holdings Pte. Ltd., the substantial shareholders of City Developments Limited.

Concurrent with his resignation as a Director of City Developments Limited, Mr Kwek Leng Peck has also tendered his resignation as a Director of Millennium & Copthorne Hotels Limited, a principal subsidiary of City Developments Limited.
Shareholding interest in the listed issuer and its subsidiaries?
Shareholding Details
City Developments Limited - 43,758 ordinary shares
Past (for the last 5 years)
Please refer to Annexure A
Please refer to Annexure B