CDL shares fell as much as 7% before paring some losses before noon. They are set to close at the lowest since 2009.

City Developments Limited (CDL) lost its position as Singapore’s largest listed developer after its stock fell on Monday, underscoring investors’ concern about the family feud unfolding in public. 

Shares of the Singapore-based developer fell as much as 7% before paring some losses before noon. They are set to close at the lowest since 2009. 

Last week, CDL’s chairman and billionaire family patriarch Kwek Leng Beng sued his son and CEO Sherman Kwek, along with other board directors, accusing them of leading a coup against him. The elder Kwek also said that he has sought to dismiss his son, but was blocked from doing so by the board.

The crisis engulfing the firm has shown little sign of abating, with dueling statements coming from both sides. The tussle has prompted downgrades from analysts including those at JP Morgan and UOB Kay Hian. 

On Monday, the company said in a statement that Sherman, the younger scion of the family, will remain as CEO, while business operations remain “fully functional and unaffected”. 

The firm has lost about 60%, or nearly $7 billion, in market value since the younger Kwek took the helm in 2018. The stock dip on Monday means its market capitalisation is now smaller than rival UOL Group, a developer backed by Singapore’s Wee clan. 

The dispute is another major blow to CDL, following its setback in China a few years ago when the firm wrote down a billion-dollar investment. It casts a shadow on medium-term outlook, wrote RHB Bank Singapore analyst Vijay Natarajan in a note Monday.

He changed his rating on the stock to "neutral" from "buy". “We believe the recent lapses will make it hard for long-only institutional investors to hold CDL as a part of their portfolio,” he said. 

The legal feud is set to continue this week with a closed-door case conference scheduled Tuesday. Both sides have claimed victory after an interim injunction application last week, which among other things, led to an undertaking from the two new directors not to exercise their powers until further court orders.

CDL, which was originally listed as the lead plaintiff along with the elder Kwek and other directors, was not involved in the interim injunction hearing due to “disputes as to the validity of the board resolution authorising the company to be an applicant”, according to an exchange filing from the firm Monday.

Analysts including Citi Research said that a positive resolution would be a major share price catalyst longer term, since the stock of the firm is undervalued.