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March 28, 2017

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Vanke sets no time frame for new board

CHINA Vanke Co, the subject of a protracted battle for boardroom control, said yesterday that it has no time frame set to select a new board as various parties are discussing proposals, although the makeup of its board is a key focus.

Board Secretary Zhu Xu said after Vanke reported 2016 net profit rose 16 percent to 21 billion yuan (US$3.1 billion).

The tenure of Vanke’s current board members expires this month. The company has yet to set a meeting to elect new directors but its rules allow the current board to serve until a new one is formed.

The property developer has been in crisis since late 2015 as financial conglomerate Baoneng Group built up a 25 percent stake to become its largest shareholder and sought to oust management.

But last week Vanke said state-owned Shenzhen Metro Group, a key ally, became its largest shareholder in terms of voting rights after a proxy agreement with its third-biggest shareholder, paving the way for the metro operator to take control of the home builder.

Vanke said in a statement on Sunday that Baoneng has promised to maintain Vanke’s independence and would not use its position to hurt the developer’s interests.

Vanke President Yu Liang said yesterday that Shenzhen Metro will also support the developer’s mixed ownership.

“As a cornerstone investor, it will support Vanke’s development. If Vanke hasn’t done anything wrong with its management, there’s no reason to change,” Yu said when asked about Shenzhen Metro’s growing influence inside Vanke.

“In China’s first and second-tier cities, ‘railway plus property’ strategy will be a major model ... some countries in Belt and Road have also invited us to explore railway opportunities,” he added.

Vanke said China’s property sector tightening would help sustain healthy development, and the latest measure to curb buying of new commercial property in Beijing by individuals would have little impact on its commercial property.


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