
Among the assets in Sincere Property’s portfolio is the CHINT TUS Harbor in Shanghai
For the second time in less than three months, a board member of City Developments Ltd has stepped down over concerns about the Singaporean firm’s investment in mainland Chinese developer Sincere Property Group.
The resignation of independent non-executive director Koh Thiam Hock was announced in a filing with the Singapore Exchange on Tuesday, with immediate effect. The 70-year-old former vice chairman of Bank of America in Singapore had served in the role at CDL since September 2016.
“Having shared his observations, concerns and suggestions on the group’s investment in Sincere Property Group with all members of the board, Mr Koh is of the view that it is most appropriate for him to now step down as a director,” CDL said in the filing.
Followed Out the Door
Koh’s sudden exit came on the heels of the October resignation of non-executive, non-independent director Kwek Leng Peck after more than 30 years in his role.
In stepping down, Kwek had cited disagreements with the board and management about CDL’s investment in Sincere, as well as the company’s approach to its struggling hospitality division, Millennium & Copthorne Hotels Ltd (M&C). Kwek is the cousin of CDL executive chairman Kwek Leng Beng and the uncle of CDL group chief executive and executive director Sherman Kwek.

Koh Thiam Hock has done all he can for CDL
CDL announced in April that it had agreed to acquire a 51 percent stake in Chongqing-based Sincere for RMB 4.39 billion ($621 million). The news came just under a month after four domestic bonds issued by Sincere were suspended from trading for a day after the developer had failed to make payments on the instruments worth an aggregate RMB 2.6 billion.
In the unaudited financial statements for the first six months of the year, CDL estimated the fair value of Sincere’s net identifiable assets at RMB 9 billion. Based on its purchase consideration of S$882 million (about $665 million), which was on an agreed valuation of Sincere at RMB 8.6 billion, CDL recognised S$43.2 million of negative goodwill for its joint controlling interest and a S$7.7 million mark-to-market gain on a 9 percent call option, which was included in the takeover but cannot be exercised before July 2022.
In early November, CDL announced the appointment of Deloitte & Touche Financial Advisory Services to assist in reviewing its investment in Sincere. Upon completing its review, Deloitte said there were good assets from which CDL could extract further value.
Even so, CDL said it would weigh Deloitte’s findings and those of auditor KPMG before finalising its own assessment of the fair value of the Sincere assets by the end of 2020.
Fresh Faces and Bleak Guidance
In late November, CDL issued guidance predicting a full-year loss for 2020, which it linked to the the expected continued effects of the COVID-19 pandemic.
CDL foresees its global hospitality segment, led by wholly owned M&C, recording a deficit in 2020 amid the ongoing COVID crisis, as the group continues to smart from its £776 million (then $989 million) buyout of the London-listed hospitality firm last year.
Also in November, CDL named two new board members, hospitality veteran Daniel Desbaillets and investment consultant Chong Youn Chou, as independent non-executive directors. CDL also on Tuesday announced the appointment of Carol Fong as an independent non-executive director and a member of the remuneration committee and board committee, replacing Koh. Fong, 59, is the group chief executive of CGS-CIMB Securities Singapore.
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