Executive Summary

Singapore’s corporate landscape in 2025 faced unprecedented governance challenges that tested the city-state’s reputation as a trusted financial hub. From family business disputes to multi-billion dollar corporate collapses, these events exposed systemic weaknesses in oversight, transparency, and succession planning. This comprehensive case study examines the root causes, consequences, and potential solutions to strengthen Singapore’s corporate governance framework.

Case Study 1: City Developments Limited (CDL) – The Family Business Succession Crisis

Background and Timeline

City Developments Limited, one of Singapore’s largest property and hotel groups, became embroiled in a public boardroom dispute in early 2025 between executive chairman Kwek Leng Beng and his son, CEO Sherman Kwek. The elder Kwek accused his son of orchestrating a boardroom takeover by pushing through appointments of independent directors and restructuring board committees without full board approval.

Core Governance Problems Identified

Succession Planning Failure: Despite being a publicly listed company with institutional investors, CDL operated with unclear succession protocols typical of family-controlled businesses. The transition of power from father to son lacked formal structure, transparent communication, or proper board oversight.

Board Independence Compromised: The dispute revealed that independent directors may have been influenced by family dynamics rather than acting solely in shareholders’ interests. Questions arose about whether these directors were truly independent or aligned with particular family factions.

Lack of Separation Between Ownership and Management: The concentration of executive power within a single family created conditions where personal disputes could escalate into corporate governance crises affecting thousands of shareholders.

Inadequate Conflict Resolution Mechanisms: CDL lacked formal mechanisms to address family disputes before they became public spectacles that damaged shareholder value and corporate reputation.

Impact on Singapore

The CDL dispute had immediate and cascading effects on Singapore’s corporate ecosystem. The company’s share price suffered as investor confidence wavered, with many institutional investors questioning whether family-controlled businesses could be trusted stewards of public capital. The controversy highlighted a broader pattern in Singapore where prominent family businesses often struggle with generational transitions, creating uncertainty for minority shareholders who have limited recourse when governance breaks down.

Outlook and Prognosis

Without intervention, the CDL case could set a troubling precedent for other family-controlled Singapore companies facing succession issues. The short-term outlook involves continued volatility in CDL’s operations as management focuses on asset sales and profitability improvements to restore confidence. Long-term consequences may include increased scrutiny of all family-controlled listed companies in Singapore, potentially leading to valuation discounts as investors price in governance risk premiums.

Solutions Framework

Immediate Actions (0-12 months):

1. Mandatory Family Constitution for Listed Companies: Require all family-controlled listed companies to establish and publicly disclose a family constitution that outlines succession procedures, conflict resolution mechanisms, and governance structures that separate family interests from corporate interests.
2. Enhanced Board Composition Requirements: Mandate that family-controlled listed companies maintain at least 50% truly independent directors (with stricter independence criteria), including at least one independent director with no prior business relationships with the family.
3. Succession Planning Disclosure: Require listed companies to disclose detailed succession plans for key executive positions, including timelines, evaluation criteria, and contingency arrangements if planned transitions fail.

Medium-term Solutions (1-3 years):

4. Establish a Family Business Governance Institute: Create a dedicated institution to provide training, certification, and advisory services specifically for family businesses transitioning to professional management or navigating generational change.
5. Minority Shareholder Protection Fund: Establish a fund managed by Singapore Exchange (SGX) that provides legal and financial support to minority shareholders pursuing legitimate governance complaints against controlling shareholders.
6. Board Effectiveness Reviews: Mandate annual independent board effectiveness reviews for all listed companies, with results disclosed to shareholders and specific action plans for addressing identified weaknesses.

Long-term Structural Changes (3-5 years):

7. Dual-Class Share Reform: Consider prohibiting or strictly limiting dual-class share structures that give founding families disproportionate voting power relative to economic ownership, aligning Singapore with best practices in markets like Hong Kong and the United States.
8. Enhanced Fiduciary Duty Framework: Strengthen legal frameworks that hold controlling shareholders and directors personally liable for breaches of fiduciary duty, with meaningful penalties that deter governance failures.
9. Family Business Transition Incentives: Provide tax incentives and regulatory support for family businesses that voluntarily adopt best-practice governance structures, including professional management appointments and formal succession planning.

Case Study 2: Hyflux – The Largest Corporate Collapse in Singapore’s History

Background and Timeline

Hyflux, once hailed as a Singapore success story led by entrepreneur Olivia Lum, collapsed spectacularly with nearly $3 billion in debt. The company’s flagship Tuaspring project, a combined desalination and power plant, incurred massive losses leading to the company’s first net loss in 2017. By November 2020, Hyflux entered judicial management, and in July 2021, it was approved for winding up. The criminal trial of former CEO Olivia Lum began in August 2025, with approximately 34,000 investors facing losses of about $900 million through perpetual securities and preference shares.

Core Governance Problems Identified

Complex Financial Engineering Without Adequate Disclosure: Hyflux used sophisticated financial instruments like perpetual securities and preference shares that many retail investors did not fully understand. The company’s disclosure practices failed to adequately communicate the risks these instruments carried, particularly their subordination to secured creditors in bankruptcy scenarios.

Project Finance Complexity and Oversight Failures: The Tuaspring project involved intricate contractual arrangements, technological risks, and market exposure to volatile electricity prices. Board oversight appeared insufficient to identify and mitigate these compounding risks before they became catastrophic.

Inadequate Risk Management Framework: Despite operating in capital-intensive infrastructure with long payback periods, Hyflux lacked robust risk management systems to monitor project performance, market conditions, and financial stress indicators that could trigger early intervention.

Retail Investor Protection Gaps: The distribution of perpetual securities and preference shares to retail investors through banks and financial advisors occurred without sufficient assessment of investor understanding or suitability, revealing gaps in consumer protection frameworks.

Delayed Disclosure of Financial Distress: There are questions about whether Hyflux disclosed material adverse developments in a timely manner, allowing investors to make informed decisions before losses became irreversible.

Impact on Singapore

The Hyflux collapse has been devastating for Singapore’s reputation as an investor-friendly market. Approximately 34,000 investors, many of them retail investors who viewed Hyflux as a safe, Singapore-government-linked investment, lost substantial retirement savings. The collapse has created a crisis of confidence in perpetual securities as an investment instrument, with many investors now questioning whether they can trust disclosures from Singapore-listed companies. The case has also exposed weaknesses in Singapore’s investor recourse mechanisms, as affected investors have found it extremely difficult to recover losses through legal channels.

Outlook and Prognosis

The Hyflux case will likely cast a long shadow over Singapore’s capital markets for years to come. Retail investors may become more risk-averse, potentially reducing participation in equity and hybrid security markets. Companies attempting to raise capital through innovative instruments will face heightened skepticism and likely demand higher risk premiums. The criminal proceedings against former executives may take years to conclude, prolonging uncertainty about accountability and potential recovery for investors.

Solutions Framework

Immediate Actions (0-12 months):

1. Perpetual Securities Reform: Implement strict rules requiring that perpetual securities and similar hybrid instruments can only be sold to accredited investors unless accompanied by mandatory cooling-off periods, standardized risk warnings, and suitability assessments conducted by independent advisors.
2. Enhanced Continuous Disclosure Requirements: Mandate that listed companies disclose material adverse developments within 24 hours of board awareness, with specific requirements around project performance metrics, covenant breaches, and liquidity stress indicators.
3. Independent Project Oversight for Large Capital Projects: Require listed companies undertaking capital projects exceeding 20% of market capitalization to appoint independent technical and financial monitors who report quarterly to shareholders.

Medium-term Solutions (1-3 years):

4. Investor Recourse Enhancement: Implement the MAS consultation proposals on investor recourse, including statutory derivative actions, representative actions for groups of affected investors, and expedited dispute resolution mechanisms specifically for securities misconduct cases.
5. Financial Instrument Complexity Limits: Establish a regulatory framework that requires plain-language explanations and mandatory risk scenario modeling for any financial instruments marketed to retail investors, with specific restrictions on instruments that combine debt-like and equity-like features.
6. Board Risk Committee Mandates: Require all listed companies above a certain market capitalization to establish dedicated board risk committees with at least one member having demonstrable expertise in the company’s core business risks and independent authority to commission risk assessments.
7. Retail Investor Education Initiative: Launch a comprehensive public education campaign about investment risks, with particular focus on subordination, capital structure, and the distinctions between deposits, bonds, preference shares, and perpetual securities.

Long-term Structural Changes (3-5 years):

8. Infrastructure Project Governance Framework: Develop specialized governance requirements for companies undertaking large infrastructure or complex technology projects, including mandatory stage-gate reviews, independent technical audits, and stress testing before major capital commitments.
9. Investor Compensation Scheme Enhancement: Expand Singapore’s investor compensation scheme to provide partial recovery for retail investors in cases of corporate failure involving material disclosure breaches or governance failures, funded by industry levies.
10. Corporate Rescue and Restructuring Reform: Strengthen judicial management and restructuring frameworks to prioritize retail investor recovery in cases where companies used retail-targeted instruments, potentially including super-priority status for certain retail claims.
11. Auditor and Advisor Liability Framework: Enhance legal frameworks holding auditors, financial advisors, and underwriters accountable for failures to identify or disclose material risks when marketing securities to retail investors, with meaningful penalties and professional sanctions.

Case Study 3: Seatrium – Corruption and Cross-Border Compliance Failures

Background and Timeline

In July 2025, Seatrium (formerly part of Keppel Corporation) announced it would pay approximately $217 million to Brazilian authorities and $73 million to Singapore authorities to settle a long-running corruption probe linked to Brazil’s investigation of its offshore and marine operations. Subsequently in August, Keppel filed a $68.4 million arbitration claim against Seatrium over residual obligations tied to the matter.

Core Governance Problems Identified

Inadequate Anti-Corruption Controls: Despite operating in high-risk jurisdictions and industries known for corruption challenges, Seatrium’s predecessor entities maintained insufficient controls to prevent, detect, and address corrupt practices in international operations.

Cross-Border Compliance Gaps: The company failed to maintain consistent compliance standards across its global operations, with particularly weak oversight of subsidiaries and joint ventures operating in emerging markets with high corruption risks.

Management Oversight Failures: The scale and duration of corrupt practices suggest fundamental breakdowns in management oversight, internal audit effectiveness, and corporate culture regarding ethical business practices.

Third-Party Due Diligence Weaknesses: The company appears to have failed to conduct adequate due diligence on agents, intermediaries, and business partners in high-risk markets, allowing corrupt actors to operate under the company’s name.

Post-Merger Integration Risks: The corruption issues originated in legacy Keppel operations, highlighting challenges in integrating compliance cultures and addressing historical liabilities when companies undergo restructuring or mergers.

Impact on Singapore

The Seatrium corruption case has damaged Singapore’s reputation as a jurisdiction with zero tolerance for corruption and strong rule of law. The involvement of a Temasek-linked company raises questions about oversight effectiveness at the government-linked company (GLC) level. The case has also exposed Singapore companies to significant cross-border legal and financial risks when operating internationally, potentially affecting the competitiveness of Singapore-based multinationals in global markets. The financial penalties, while substantial, may be viewed by some as a cost of doing business rather than a genuine deterrent, raising questions about whether enforcement is sufficiently stringent.

Outlook and Prognosis

The Seatrium case signals that Singapore regulators and prosecutors are increasingly willing to pursue and penalize corporate wrongdoing, even when it involves prominent companies with government links. This represents a maturation of Singapore’s enforcement posture and alignment with international anti-corruption standards. However, the effectiveness of these enforcement actions will ultimately be measured by whether they drive genuine cultural and systemic changes in how Singapore companies approach compliance, particularly in high-risk markets. The ongoing arbitration between Keppel and Seatrium over liability allocation may create prolonged uncertainty about ultimate responsibility and accountability.

Solutions Framework

Immediate Actions (0-12 months):

1. Mandatory Compliance Officer for International Operations: Require all Singapore-listed companies with significant international operations to appoint a chief compliance officer reporting directly to the board, with authority independent from business operations.
2. High-Risk Market Framework: Establish a regulatory framework requiring enhanced due diligence, board approval, and ongoing monitoring for operations in jurisdictions identified as high-risk for corruption by Transparency International or similar indices.
3. Third-Party Due Diligence Standards: Implement mandatory standards for vetting agents, intermediaries, consultants, and joint venture partners in international operations, with periodic re-verification and board reporting.

Medium-term Solutions (1-3 years):

4. GLC Governance Enhancement: Strengthen oversight mechanisms for government-linked companies, including independent compliance audits, enhanced reporting to shareholders and stakeholders, and specialized board committees focused on international compliance risks.
5. Whistle-blower Protection and Rewards: Enhance whistle-blower protection frameworks with meaningful financial rewards for reporting corruption, guaranteed anonymity, and strict penalties for retaliation against whistle-blowers.
6. Compliance Culture Measurement: Develop standardized metrics and external auditing requirements to assess and publicly report on corporate compliance culture, including employee surveys, incident reporting rates, and training effectiveness.
7. Cross-Border Enforcement Cooperation: Strengthen Singapore’s participation in international anti-corruption enforcement networks, including information sharing agreements and coordinated investigations with foreign authorities.

Long-term Structural Changes (3-5 years):

8. Individual Criminal Liability Enhancement: Strengthen frameworks for prosecuting individual executives and directors for corruption offenses, with penalties including substantial prison terms, personal fines, and disqualification from serving in corporate leadership roles.
9. Corporate Compliance Credit System: Establish a system where companies with demonstrated strong compliance track records receive regulatory benefits (faster approvals, reduced reporting requirements), while those with compliance failures face enhanced scrutiny.
10. Supply Chain Compliance Extension: Extend compliance requirements beyond direct operations to cover supply chains and business partners, requiring companies to conduct anti-corruption due diligence throughout their value chains.
11. Successor Liability Framework: Clarify and potentially strengthen legal frameworks around successor liability in corporate restructurings to ensure that compliance obligations and potential penalties cannot be easily shed through corporate reorganizations.

Case Study 4: Anti-Money Laundering Failures Across Financial Institutions

Background and Timeline

In July 2025, MAS imposed $27.45 million in penalties on nine financial institutions for breaches of anti-money laundering (AML) and countering the financing of terrorism (CFT) requirements. The action followed supervisory reviews into institutions with ties to persons of interest in a major money laundering case uncovered in August 2023. Penalized institutions included Credit Suisse Singapore Branch, UOB, UBS Singapore Branch, Citibank Singapore, Bank Julius Baer, LGT Bank, UOB Kay Hian, Blue Ocean Invest, and Trident Trust Company. Reviews found that while policies existed, breaches stemmed from poor or inconsistent implementation.

Core Governance Problems Identified

Implementation Gap: Financial institutions had adequate AML/CFT policies on paper but failed to consistently implement them in practice, suggesting weaknesses in operational controls, staff training, and compliance culture.

Customer Due Diligence Failures: Multiple institutions failed to conduct adequate due diligence on high-risk customers, including insufficient verification of source of wealth, inadequate ongoing monitoring of transactions, and failure to identify red flags that should have triggered enhanced scrutiny.

Technology and Systems Deficiencies: Many institutions relied on outdated systems or manual processes that were inadequate for identifying suspicious patterns in increasingly complex transaction networks.

Compliance Resource Constraints: Some institutions, particularly smaller private banks and trust companies, appear to have under-invested in compliance staffing, systems, and expertise relative to their risk profiles.

Cross-Border Information Gaps: Institutions struggled to obtain adequate information about customers’ activities in foreign jurisdictions, creating blind spots that money launderers exploited.

Incentive Misalignment: Business development and revenue generation often took precedence over compliance considerations, with relationship managers inadequately trained in AML requirements and insufficiently accountable for compliance failures.

Impact on Singapore

The widespread AML failures across multiple prominent financial institutions have significantly damaged Singapore’s reputation as a well-regulated financial center. The 2023 money laundering case involved approximately $3 billion in assets and exposed Singapore to international criticism about whether it had become a haven for illicit wealth. The penalties, while substantial, are relatively modest compared to the scale of the money laundering that occurred, raising questions about whether enforcement is sufficiently punitive to change institutional behavior. Singapore now faces heightened scrutiny from international bodies like the Financial Action Task Force (FATF), with potential consequences including restrictions on cross-border banking if remediation is deemed insufficient.

Outlook and Prognosis

The AML enforcement actions signal that Singapore authorities are taking financial crime seriously and are willing to penalize even the largest and most prestigious institutions. However, the true test will be whether these actions drive fundamental changes in how financial institutions approach AML compliance, particularly in balancing business growth with risk management. The financial sector faces increased costs as compliance requirements intensify, potentially affecting Singapore’s competitiveness as a wealth management hub, particularly for ultra-high-net-worth individuals. There is risk that overly aggressive compliance requirements could push legitimate business to other jurisdictions, but failure to address AML weaknesses could result in more severe reputational and regulatory consequences.

Solutions Framework

Immediate Actions (0-12 months):

1. Real-Time Transaction Monitoring Enhancement: Require all financial institutions to implement real-time transaction monitoring systems with artificial intelligence and machine learning capabilities to identify suspicious patterns, with specific performance standards and regular testing.
2. Beneficial Ownership Registry: Establish a comprehensive beneficial ownership registry for all corporate entities and trusts operating in or through Singapore, accessible to financial institutions and law enforcement with appropriate safeguards.
3. Enhanced Due Diligence for High-Risk Customers: Implement stricter standards for politically exposed persons (PEPs), high-net-worth individuals from high-risk jurisdictions, and complex ownership structures, including mandatory independent source of wealth verification.

Medium-term Solutions (1-3 years):

4. RegTech Innovation Hub: Establish a regulatory technology (RegTech) innovation hub that develops and shares advanced compliance tools, creating economies of scale and ensuring that smaller institutions have access to sophisticated monitoring capabilities.
5. Information Sharing Platform: Create a secure platform enabling financial institutions to share information about suspicious customers and transactions (within appropriate legal frameworks), reducing the ability of bad actors to exploit information silos.
6. Compliance Effectiveness Audits: Mandate regular independent audits of AML/CFT program effectiveness (not just policy adequacy), with results reported to regulators and serious deficiencies resulting in business restrictions until remediated.
7. Enhanced Training and Certification: Require all customer-facing staff and compliance personnel to obtain certified AML training with periodic recertification, including scenario-based testing of practical application skills.

Long-term Structural Changes (3-5 years):

8. Individual Accountability Regime: Implement an individual accountability regime similar to the UK’s Senior Managers and Certification Regime, where specific executives are personally accountable for AML compliance in their areas of responsibility, with potential personal liability for failures.
9. Risk-Based Capital Requirements: Link regulatory capital requirements to AML compliance track records, requiring institutions with poor compliance histories to maintain higher capital buffers to reflect increased risk.
10. Public Disclosure of AML Performance: Require financial institutions to publicly disclose key AML metrics including number of suspicious transaction reports filed, customer relationships terminated for AML concerns, and regulatory findings, enabling market discipline.
11. Cross-Border Regulatory Cooperation: Strengthen Singapore’s participation in international information exchange networks, including automatic exchange of information about beneficial ownership, high-risk customers, and suspicious transactions.
12. Penalty Framework Reform: Revise penalty frameworks to ensure that fines are proportionate to the scale of compliance failures and serve as genuine deterrents, potentially including percentage-of-revenue formulas and escalating penalties for repeat offenders.

Systemic Impact on Singapore’s Financial Hub Status

Reputation and Trust Erosion

The confluence of governance failures in 2025 has created a perfect storm challenging Singapore’s carefully cultivated reputation as a trusted, well-regulated financial center. International investors, particularly institutional investors who form the backbone of Singapore’s capital markets, are reassessing whether Singapore-listed companies warrant the premium valuations they once commanded. The repeated instances of governance failures suggest systemic rather than isolated problems, raising fundamental questions about the effectiveness of Singapore’s regulatory architecture.

Capital Market Consequences

The immediate capital market impacts are already evident. Trading volumes on SGX have shown volatility as investors become more selective about Singapore exposures. IPO activity has slowed as companies question whether Singapore can provide the valuation multiples and investor demand available in other markets. The cost of capital for Singapore-listed companies has increased as investors demand higher risk premiums to compensate for perceived governance risks. Family-controlled companies face particular challenges, with some trading at significant discounts to comparable professionally managed firms.

Regulatory Credibility Test

Singapore’s regulators face a crucial credibility test. The regulatory responses to date, including penalties and enhanced oversight, demonstrate willingness to enforce standards. However, critics argue that penalties have been too modest relative to the scale of failures and that enforcement often comes after extensive damage has occurred rather than preventing problems proactively. The true test of regulatory credibility will be whether these enforcement actions drive meaningful behavioral change and whether regulators are willing to impose more severe sanctions, including potential delisting or criminal prosecutions, when warranted.

Competition with Regional Financial Centers

Singapore competes with Hong Kong, Tokyo, and increasingly Dubai and other emerging centers for regional financial hub status. Corporate governance failures provide ammunition for competitors and may influence decisions about where to list companies, establish regional headquarters, or manage wealth. However, Singapore retains significant advantages including political stability, rule of law, and sophisticated financial infrastructure. The key question is whether Singapore can address governance weaknesses while maintaining these competitive advantages.

Comprehensive Long-Term Solutions: A 10-Year Roadmap

Year 1-2: Foundation Building and Crisis Response

Regulatory Framework Modernization: Conduct comprehensive review of corporate governance codes, securities regulations, and enforcement frameworks to identify gaps exposed by 2025 failures. Implement priority reforms addressing the most critical weaknesses.

Institutional Capacity Building: Significantly expand resources for MAS, SGX, and Commercial Affairs Department to enhance surveillance, investigation, and enforcement capabilities. Invest in technology, training, and personnel to enable proactive rather than reactive oversight.

Stakeholder Engagement: Establish regular dialogue between regulators, listed companies, investors, and civil society to rebuild trust and ensure reforms address real concerns. Create feedback mechanisms that enable continuous improvement.

Year 3-5: Structural Reform Implementation

Corporate Governance Code 2.0: Implement comprehensive revisions to Singapore’s corporate governance code incorporating lessons from 2025 failures, with particular focus on board independence, succession planning, risk management, and minority shareholder protection. Move from “comply or explain” to “comply or comply” for core principles.

Enforcement Regime Enhancement: Implement individual accountability frameworks ensuring that executives and directors face meaningful personal consequences for governance failures. Strengthen criminal prosecution capabilities for serious misconduct.

Investor Protection Infrastructure: Build comprehensive investor protection infrastructure including enhanced recourse mechanisms, investor education programs, and potentially an investor ombudsman with authority to mediate disputes and recommend remedial actions.

Technology and Innovation: Deploy advanced technologies including artificial intelligence, blockchain, and data analytics to enhance monitoring, surveillance, and compliance capabilities. Make Singapore a global leader in regulatory technology.

Year 6-10: Ecosystem Transformation and Global Leadership

Cultural Transformation: Drive fundamental shift in corporate culture from minimum compliance to governance excellence as a competitive advantage. Recognize and reward companies demonstrating governance leadership.

Regional and Global Integration: Position Singapore as a regional leader in corporate governance by sharing best practices, providing technical assistance to neighboring markets, and collaborating on cross-border enforcement.

Continuous Evolution: Establish mechanisms for ongoing governance framework evolution that anticipates emerging risks rather than reacting to crises. Create innovation sandboxes allowing experimentation with new governance models.

Outcome Measurement: Develop and publish comprehensive metrics measuring governance effectiveness across Singapore’s corporate ecosystem, with annual reporting on progress toward governance excellence goals.

Conclusion and Call to Action

The corporate governance failures of 2025 represent a critical juncture for Singapore. These challenges are serious, but they also present an opportunity for Singapore to demonstrate resilience, adaptability, and commitment to continuous improvement that has characterized its development as a nation.

The solutions outlined in this case study are ambitious and will require sustained commitment from multiple stakeholders including regulators, listed companies, investors, professional advisors, and the broader business community. Implementation will involve short-term costs and disruptions, but the long-term benefits of restored confidence, enhanced competitiveness, and sustainable capital market development far outweigh these near-term challenges.

Singapore has consistently demonstrated an ability to confront challenges directly, learn from setbacks, and emerge stronger. The governance failures of 2025, while painful, can catalyze the next generation of reforms that position Singapore as a global leader in corporate governance for decades to come.

The question is not whether Singapore can address these challenges, but whether stakeholders have the collective will to implement the necessary reforms before confidence erosion becomes irreversible. The time for action is now.