(Bloomberg) -- Pressure is mounting on an heir to Singapore’s biggest family fortune as he seeks to salvage the troubled property investment at the center of an ambitious expansion into China.In the past month, Sherman Kwek, the 45-year-old chief executive officer of City Developments Ltd., has had to contend with two more board member resignations, taking the total to three since October. His firm set up a special team to decide on the sale of assets at its joint venture with Sincere Property Group, the Chinese developer that’s driven a rift in the family, and to look at restructuring its liabilities. His father, CDL’s executive chairman, came out to defend the investment.It’s the biggest challenge yet for Kwek, who’s been at the helm for three years and spearheaded the Sincere deal in 2019. With its pipeline of 64 projects and sizable land bank, the developer increased CDL’s presence in China to about 20 cities from three and was touted as “game changing” for growth. But the coronavirus pandemic and tighter borrowing rules governing real estate firms in the country have instead forced losses on the Singaporean company.“Sherman will have to engage with investors and show that he can deliver to convince them that he’s the right person to lead the company,” said Mak Yuen Teen, associate professor of accounting at the National University of Singapore. “The Sincere investment is probably a make or break deal to either cement his role or to call for change in leadership.”Trouble started with Covid-19, which brought much of China’s economic activity to a halt at the start of 2020. Most of Sincere’s projects were put on hold or delayed, and CDL renegotiated the terms of its joint venture in April, effectively giving the firm a big valuation discount. China’s “three red lines” policy to rein in leverage in the sector only added to the woes, spelling the end of the fast growth seen in previous years and increasing liquidity constraints at Sincere, which is now seeking to accelerate asset sales.Through September, CDL lost S$76 million ($57 million) on the investment last year. While the company hasn’t announced its results for the period, CDL has said revenue at its property-development segment dropped 15%.CDL shares have lost 43% from a high in 2018.Sherman KwekNow the onus is on Sherman Kwek to turn the situation around.The Boston University graduate joined CDL in 2010 as CEO of its new China subsidiary, taking responsibility for leading the firm’s expansion there. He got promoted to the head of Singapore’s second-largest listed developer in 2018.Since then, many initiatives have happened under his watch. He engineered the privatization of Millennium & Copthorne Hotels Ltd., the hotel operator that also prompted reservations from his uncle Kwek Leng Peck and helped motivate his resignation from CDL’s board in October. He established a fund-management division, increased CDL’s stake in a Singaporean real estate investment trust and is planning a commercial REIT of U.K. office properties.But Sincere remains central to Sherman Kwek’s success and is to this date CDL’s largest single investment in China.While the Singaporean company didn’t disclose its strategy to resolve the issues at the joint venture, a media representative said the firm is focused on preserving and enhancing shareholder value, adding that “the team has been working diligently on issues relating to Sincere and the challenges it faces.”In a letter sent to local media editors earlier this month, CDL Executive Chairman Kwek Leng Beng called the recent departures an opportunity to renew its board and said the Sincere investment had to be viewed “against the backdrop of a fast-changing business environment, made even more challenging by the global pandemic.”Sincere, which didn’t respond to requests for comment, is part of Chongqing Sincere Holding (Group) Co., a conglomerate that manages more than 200 billion yuan ($31 billion) in some 20 Chinese cities. Before the Kweks went for it, the property unit had attracted other investors, including some of China’s biggest developers -- like China Evergrande Group, Sunac China Holdings Ltd. and Jinke Properties Group Co. -- but they all abandoned the idea, according to local media.Billionaire FriendsStill, Sincere was able to establish partnerships with several companies with links to some of the region’s billionaires, such as Thailand’s richest family, the Chearavanonts, Taiwan’s Samuel Yin and Chinese mining tycoon Wang Wenyin.By the time Sherman Kwek signed the first deal in May 2019, he had known Sincere’s chairman and founder, Wu Xu, for about a decade. Wu made about 2.7 billion yuan by offloading part of his ownership when the terms were renegociated in April, valuing his firm at 8.6 billion yuan, according to Bloomberg estimates. Another investor, Greenland Holdings Group Co., also went for the exit last year, selling 20% of the stake it acquired in 2016, which at the time gave Sincere a 12.5 billion valuation.Chinese developers have all been hit badly from the coronavirus crisis and new government restrictions on borrowing, and sales at debt-ridden firms could suffer further in the mid term, according to a Bloomberg Intelligence report. Now CDL will have to make a strong push to divest more of Sincere’s properties to improve its liquidity and revamp its operations, according to Justin Tang, the head of Asian research at United First Partners in Singapore.“Sincere provided a platform for City Developments to quickly gain scale in China. It didn’t look too bad a decision back then,” said Bloomberg Intelligence analyst Kristy Hung, who attributed the growing challenges to China’s new leverage rules. “The regulatory tone is increasingly negative for Chinese developers’ growth, hence adding uncertainty to Sincere’s profit contribution to CDL.”(A previous version of this story was corrected to specify that a commercial REIT of U.K. office properties is at the planning stage.)(Adds stock price move in seventh paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.