Vanke’s founder retained by its second-largest shareholder

By Cherry Cao | June 30, 2016, Thursday |

Online Edition

CHINA Resources Group, currently the second-largest shareholder of China Vanke Co, said today through its official WeChat account that it opposed an earlier proposal made by the company's major shareholder Baoneng Group calling for the firing of all 12 of the company's directors including founder and chairman Wang Shi.

State-owned China Resources said it would consider the issue regarding the reshuffle of Vanke's senior management team from an angle that will benefit the future development of the company, which is the largest homebuilder on the Chinese mainland.

On June 26, Vanke issued an announcement on the Shenzhen Stock Exchange saying Baoneng, its major shareholder with a 24.26 percent stake, called for the company to convene a shareholders' meeting to vote for the removal of all of its 12 directors.

Baoneng said Wang should be fired because he had spent most of the time between 2011 and 2014 studying overseas and not carried out any duties for the company despite collecting a combined 50 million yuan (US$7.5 million) in salary. The 11 other directors had to be sacked as well since they allowed Wang to collect the huge sum of money while he was studying.

The requisition notice came after Vanke's announcement on June 19 that it plans to acquire a unit of Shenzhen Metro Group, a latest restructuring effort made by Wang and his top management to avoid a possible takeover by Baoneng.

Under the proposal, Vanke would acquire Metro Qianhai International Development Co for 45.6 billion yuan by selling shares to the subway operator.

Both China Resources and Baoneng, which together hold a 39.5 percent stake in Vanke, opposed the restructuring plan.

Baoneng's proposal to remove Vanke's senior management is credit negative and if it materializes, could pressure the developer's rating or outlook, Moody's Investors Service said earlier.

Shares of China Vanke rose 4.25 percent today to close at HK$15.2 (US$1.96), the first gain in six trading days. Its shares on the Shenzhen bourse have been suspended trading since December 18, 2015.

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Vanke’s founder retained by its second-largest shareholder

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