The three-day suspension period for urban development in which the board of directors has reached an internal conflict. If trading is not resumed next Monday (March 3), trading will be suspended.

Some market insiders believe that the entire incident is not resolved so quickly and that urban development should resume transactions. It is expected that the stock trading volume will increase significantly after the resumed trading, and the stock price will fluctuate violently. It is not ruled out that there is a possibility of equity competition.

Urban Development (CDL) applied for a suspension of trading shortly after releasing its full-year results before opening Wednesday (February 26), and then canceled the performance conference originally scheduled to be held in the morning, causing an uproar in the market.

The group executive chairman Guo Lingming then publicly stated that he would resort to legal action and tried to fire his eldest son Guo Yizhi's position as the president of the group. The latter and the director involved in “struggle for power” later issued a statement to reveal more inside information. The two sides fought back and forth in the past three days.

According to the Singapore Exchange regulations, a stock is suspended for up to three trading days, which means that the suspension period for urban development has expired. Trading should be resumed next Monday, otherwise it is an application for suspension. The suspension may continue indefinitely until the company provides sufficient information on the situation.

Further reading

Yang Lieguo made a statement to promote Chairman Guo Yizhi to recommend “advisor” to divert attention

Yang Lieguo made a statement to promote Chairman Guo Yizhi to recommend

Guo Lingming and his son will go to court with experts: Urban development should be hired for professional management
Guo Lingming and his son will go to court with experts: Urban development should be hired for professional management

After the suspension of transactions on Wednesday, Urban Development issued a brief statement saying: “Mr. Guo Yizhi is still the president of the group until the board of directors makes a resolution on changes in the company's leadership.” The statement also said that in view of the differences within the board of directors on the composition and composition of the board of directors and the board of directors' committee, it was decided to “temporarily stop” the transaction of the company's stock. Despite the suspension of transactions, the group's business operations are still operating normally and are not affected.

There has been no announcement from the city development since then.

“From a balanced perspective, urban development should resume trading, and this dispute may continue for a while, and stocks should not be suspended,” Dr. Mai Runtian, an expert in corporate governance and a professor at the National University of Singapore's Business School, told Lianhe Zaobao.

Generally, long-term suspension of stocks is not conducive to small shareholders, and investment will face huge uncertainties.

Li Delong, partner at Kennedys Law, believes that there is no reason to suspend the stock.

Huang Yao, president of fund management company Azure Capital, said in a previous inquiry that a suspension may be a possibility, but once trading resumes, the stock will fluctuate violently until a clearer solution is released.

As for whether investors should enter the market, he believes that it depends on their personal investment time and vision.

Some market insiders speculate that a third party may enter the market to purchase stocks in the future to reach a level that is sufficient to swing the voting results. At that time, the equity transactions can be negotiated with the opposing two parties to benefit from it, because this dispute may have to be voted at the shareholders' meeting, and holding the vast majority of the shares has the advantage. The Guo family's equity in Urban Development is slightly less than 50%, but the specific internal equity allocation is not disclosed.

This week, several analysts have lowered the ratings and target prices of urban development stocks. The final trading price of urban development was 5.12 yuan, down 10% in the past year and 48% in the past five years.