By Amanda Lee

City Developments shares fell sharply after the stock resumed trading Monday amid a corporate family feud, with the tussle over leadership at the developer set to move to the courts.

Shares of the Singapore-listed property developer dropped as much as 7.0% to 4.76 Singapore dollars, equivalent to US$3.52, on Monday morning.

The company had suspended trading in its shares last Wednesday "in view of the disagreement within the board in relation to the composition and constitution of the board and the board committees."

City Developments had also released 2024 results on that day.

Kwek Leng Beng, executive chairman of City Developments, had said his son--Group Chief Executive Sherman Kwek--and a group of directors sought to consolidate control of the board and the group by changing the composition of the board and "hastily" making changes to the board committees and the governance of the group.

The news prompted some analysts to lower the company's ratings and target prices in the past few days.

The company's business operations remain fully functional and unaffected, the company said Monday.

Sherman Kwek remains the company's group CEO until there is a board resolution to change company leadership, City Developments said.

A court hearing involving City Developments is scheduled for Tuesday in Singapore's Supreme Court.

City Developments' 2024 results were overshadowed by news of a very public leadership tussle, said UOB Kay Hian analyst Adrian Loh in a note.

"While the company has extremely valuable assets in Singapore and globally, we believe the stock will likely find it difficult to perform given this overhang," Loh wrote.

He downgraded the stock to hold and lowered the target price to S$4.60 from S$7.00.

"While this is likely to dampen investor sentiment in the interim, we take the view that fundamentals remain intact, as key management continues to run the company," DBS Group Research said in a note.

There is likely to be uncertainty over the company's outlook and potential overhang on its share price until the matter is resolved, said OCBC Investment Research in a note.

The potential impact of the situation is hard to quantify, said Citi Research analyst Brandon Lee. However, as City Developments is under-owned by investors, any positive resolution would be a major share price catalyst over the longer term, Lee wrote in a note.

Write to Amanda Lee at amanda.lee@wsj.com

(END) Dow Jones Newswires

March 02, 2025 21:21 ET (02:21 GMT)

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