Guo Lingming: Yang Lieguo and other directors firmly safeguard the highest standard of governance in urban development

A family strife broke out in the Singapore real estate giant City Developments Limited (CDL). Executive Chairman Guo Lingming said that the actions carried out by his eldest son, Urban Development President Guo Yizhi and some directors were “pre-planned” in an attempt to deprive him of meaningful power as executive chairman.

Guo Lingming published an open letter on Wednesday (February 26) publicly accusing Guo Yizhi of trying to “seize power”, and disclosed a series of events starting in January this year, revealing the family's internal struggle against the listed company with a market value of nearly 4.7 billion yuan.

In his open letter, he said that on the eve of the Lunar New Year on January 28 this year, the company secretary sent an email to the board of directors, which said that Li Yizhen and Deng Aiai nominated two new independent directors.

The next day, Guo Lingming questioned the urgency of appointing two new directors without proper review.

“In addition, our nomination committee chairman Chong Yoon Chou was completely unaware of the nomination,” he said. He added that Zhang Yongchou “strongly opposed” the bypassing the nomination committee meeting originally scheduled for February 20.

Li Yizhen claimed that this “urgent concern” was a reason for the hasty appointment, but failed to provide specific details.

Guo Lingming immediately ordered the cancellation of all director interviews and emphasized the need for transparency and compliance with corporate governance norms.

But he pointed out that Li Yizhen tried to forcibly push for the proposed appointment in a board meeting convened on January 31.

On February 5, the Urban Development Board received legal advice, stating that the appointment of new directors bypassed the nomination committee and violated corporate governance guidelines. After this matter is disclosed, it will affect the company's reputation and cause speculation.

Despite this, on February 7, the board meeting was held as scheduled, but no votes were conducted. A written director resolution on the appointment of two new directors was issued within hours and approved, bypassing the nomination committee.

In response, Guo Lingming said: “This confirms that Guo Yizhi, Li Yizhen, Deng Aiai and other directors who acted with them planned the action in advance.”

“I have no choice but to send an email on February 8, 2025, asking Guo Yizhi to be removed from his position as CEO of the group. He bypassed good governance and appointed two new directors to consolidate his power by irregular means, the latest in his series of mistakes.”

On February 9, the reorganized board of directors led by Li Yizhen opposed Guo Lingming's attempt to fire Guo Yizhi.

Guo Lingming believes that the demolition of the existing nomination committee and replacing it with the Nomination and Remuneration Committee (NRC) is “deliberately excluding independent supervision and allowing the majority group to control urban development leadership and decision-making without restrictions.”

This restructuring action places the election of key managers entirely under Guo Yizhi Group's free decision rights and allows arbitrary appointment and removal of board members.

He also believes that the action deprived him of meaningful power as Executive Chairman. Because despite his decades of institutional knowledge, he was unable to hold a position on the newly established nomination and compensation committee by the guidelines.

Guo Lingming said that he and some members of the board of directors, including Yang Lieguo, are firmly committed to maintaining the highest standards of governance and accountability.

In order to restore group stability and reuniting the leadership and shareholder interests of urban development, Guo Lingming proposed to fire Guo Yizhi as president because “urban development has put in place internal measures to ensure business stability is maintained without the CEO.”

“We will strengthen and consolidate the governance framework for urban development to prevent future violations and ensure that no single group can surpass corporate governance guarantees,” said Guo Lingming.

Urban development celebrated its 60th anniversary the year before yesterday.

The company was originally established by a group of professionals, and its management team was led by a chartered quantity surveyor, but it suffered losses for years due to improper operation. Later, with the consent of his father Guo Fangfeng, Guo Lingming acquired a stake and obtained a majority stake in Urban Development.

Today, urban development has grown from a small company with only eight employees to the world's leading real estate company, expanding its business scope to places such as the United Kingdom and Japan.

Guo Lingming's statement was released after the Urban Development announced the suspension of transactions on the morning of February 26 and cancelled the 2024 performance press conference originally scheduled to be held on the same day.

Urban Development released its results before the market opened on Wednesday, achieving revenue of 1.7 billion yuan in the second half of fiscal year 2024, a year-on-year decrease of 23.6%. Net profit after deducting taxes and minority shareholders' interests (PATMI) fell by 54.7% year-on-year to 113.54 million yuan.

The board of directors decided to pay a final dividend of 8 cents per share for fiscal year 2024, together with the special interim dividend of 2 cents per share that had been paid in September last year, and the total dividend of 10 cents per share for fiscal year 2024 was lower than 12 cents per share for fiscal year 2023.

Urban Development's share price closed at 5.12 yuan on Tuesday (25th).