By Xie Yu and Li Gu

HONG KONG/SHANGHAI (Reuters) - Stocks and bonds of Chinese property developer Gemdale plunged on Tuesday after the resignation of its chairman, as investors took no chances amid the deepening debt crisis in the country's real estate sector.

Ling Ke, 64, had resigned due to health reasons, Shanghai-listed Gemdale said on Monday evening, adding that he would be replaced by President Huang Juncan.

After the sell-off on Tuesday, the company said in a filing that Ling's resignation was a normal transfer of management responsibilities and would not have a big impact on the firm's operations.

It did not elaborate on the health reasons.

Investors concerned that the sector's broader debt problems were engulfing the firm dumped the stock, which dropped by the daily 10% limit in afternoon trading in Shanghai.

Gemdale's onshore bonds maturing in 2024, 2025 and 2026 also tumbled 25%, 21% and 20%, respectively, before they were suspended from trade.

"Investors are worried about Gemdale's financial condition as the resignation of its chairman was a surprise," said Ting Meng, a credit analyst at ANZ Bank China.

Moody's downgraded Gemdale on Tuesday to 'B3' from 'Ba3' and its unit Famous Commercial Ltd to 'Caa1' from 'B1', and changed their outlook to negative, citing a materially weakened credit profile and high refinancing risks due to declining home sales, deteriorating liquidity and a large amount of debt maturing over the next 12 to 18 months.

Gemdale has a total debt of 21.1 billion yuan ($2.88 billion) in the form of bonds due by the end of 2024, according to LSEG data.

The developer's $480 million dollar bonds, to mature next August, were being bid around 20 cents against the dollar, almost half the levels earlier this month, traders said.

Gemdale did not immediately respond to a Reuters request for comment. It ranked as China's 8th largest developer last year, according to private research firm China Real Estate Information Corp.

It had sales of 221.8 billion yuan ($30.3 billion) last year and its financial fundamentals were stable, the company said in its annual report published in April.

($1 = 7.3149 Chinese yuan)

(Reporting by Xie Yu in Hong Kong and Li Gu in Shanghai; Additional reporting by Clare Jim in Hong Kong; Editing by Edwina Gibbs, Miral Fahmy and Kim Coghill)