CORPORATE GOVERNANCE that a resolution in writing be circulated to the Directors after the 7 Feb Meeting, so that the Directors could consider the resolutions further. A Directors’ Resolution in Writing (“DRIW 1”) was then circulated after the 7 Feb Meeting to seek the definitive votes of the Board on the Appointments, and approval was obtained from a majority of the Directors on DRIW 1, and the Opposing Directors voted against the Appointments. The Appointments were therefore put into effect in accordance with the Company’s Constitution. Following the Appointments, the Relevant IDs also proposed changes to the composition of the Committees including the constitution of the NRC (“Changes to the Constitution of Committees”), as well as other matters in connection with the Company’s key and significant subsidiaries (“Other Matters”). A Board meeting was requested by the Relevant IDs on 17 February 2025, in accordance with the Constitution, to consider the Changes to the Constitution of Committees and the Other Matters. As the meeting on 17 February 2025 was not attended by all the Opposing Directors due to short notice, amongst other reasons, a Directors’ Resolution in Writing (“DRIW 2”) in connection with the subject matters was circulated by the Relevant IDs on the same day to seek the votes of the Board on the same, but it was conveyed that DRIW 2 would only be considered on 21 February 2025, giving time and opportunity to the Opposing Directors who had not attended the meeting to seek clarification and engage with the Relevant Directors on these proposals. Approval was obtained from a majority of the Directors on DRIW 2 on 21 February 2025 (but with the Opposing Directors objecting), and the subject matters including the Changes to the Constitution of Committees as set out in DRIW 2 were put into effect in accordance with the Company’s Constitution. Due to governance concerns in relation to the role and involvement of Dr Catherine Wu at the relevant time, as well as the belief by the Proposing IDs that the other members of the then NC were not likely to support the proposed appointments of new directors, the Relevant IDs deemed that it was necessary and appropriate that the Appointments, and Changes to the Constitution of Committees and the Other Matters, should be proposed directly to the full Board for approval without the usual process of prior review and recommendation by the then NC. All members of the Board, including the then NC, were given the opportunity to review and interview the candidates albeit at short notice and over the beginning of the Chinese New Year period. It was intended that at the 7 Feb Meeting with all NC members also present, the 7 Feb Meeting could be paused to convene the NC meeting. However, the offer to convene the NC meeting during the 7 Feb Meeting was declined. In undertaking the actions in relation to the Appointments and Changes to the Constitution of Committees and the Other Matters, the Relevant IDs and the Group CEO acted in compliance with the law, the Listing Manual and the Company’s Constitution. Under these provisions, they have the legal right to convene the aforementioned Board meetings and have the Appointments and Changes to the Constitution of Committees decided at the Board level without the prior recommendation of the NC. The above deviation from the NC’s terms of reference and the provisions of the CG Code concerning the Appointments and Changes to the Constitution of Committees caused the Opposing Directors to file the Court Application, as these Opposing Directors did not agree with the position and actions taken by the Relevant IDs and the Group CEO. On 12 March 2025, the Directors agreed to put aside their differences for the greater good of the Company and its stakeholders and reached a settlement and discontinued the Court Application. Separately, Millennium & Copthorne Hotels Limited had also received the resignation of Dr Catherine Wu as its independent advisor on 4 March 2025. Following the settlement, the Appointments and Changes to the Constitution of Committees will remain in effect as announced by the Company on 7 February 2025 and 21 February 2025 respectively. As stated above, (a) the CVs of Ms Wong and Ms Young were circulated to the Board; (b) invitations for separate virtual interviews with Ms Wong and Ms Young were circulated to all Directors; (c) interview notes prepared by the Relevant IDs were circulated to the Board; (d) the 7 Feb Meeting was convened to discuss the Appointments; and (e) DRIW 1 was circulated after the 7 Feb Meeting to seek the definitive votes of the Board on the Appointments. Accordingly, notwithstanding the above deviation from the NC’s terms of reference and the provisions of the CG Code concerning the Appointments, the Company’s position (based on the majority votes of the Board) is that there was a formal and deliberate process adopted in relation to the Appointments and that such process is consistent with the intent of Principle 4 of the CG Code, which states that the Board has a formal and transparent process for the appointment and re-appointment of directors, taking into account the need for progressive renewal of the Board. Key Information on Directors (Provision 4.5) Please refer to the ‘Board of Directors’ section in the annual report for key information on the Directors, including the dates of their first appointment and last re-election to the Board (if applicable), their academic/ professional qualifications, major appointments/principal commitments, directorships held in listed companies CORPORATE GOVERNANCE REPORT CITY DEVELOPMENTS LIMITED 14
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