Vanke Major Holder Objects to Baoneng’s Board Reshuffle Motion

  • China Resources disagreed with removing all Vanke directors
  • Will consider board composition that is best for Vanke

China Vanke Co.’s second-largest shareholder said it objects to a request to remove almost all board members of the developer, a potential relief to the firm trying to push through a reorganization proposal.

China Resources (Holdings) Co. disagreed with the resolution to remove all Vanke directors from its board, according to a statement the state-owned firm posted on its official WeChat account. Earlier this week, Vanke received a “requisition notice” from units of Baoneng Group, which became the builder’s largest shareholder last year, for an extraordinary general meeting aimed at removing 10 directors from its 11-member board.

The latest development underlines the competing interests of state-owned China Resources, a long-term Vanke major shareholder, and Baoneng, amid a restructuring of mainland China’s largest listed developer. Shenzhen-based Vanke has announced a 45.6 billion yuan ($6.9 billion) share sale to Shenzhen Metro Group in a bid to end a battle for control of the developer that has been going on for more than six months. Both China Resources and Baoneng have said they opposed the deal that would make the southern Chinese rail operator Vanke’s largest shareholder.

“China Resources will consider the composition of Vanke’s future board and supervisory committee” based on what is in the best interest of the company, China Resources said in the statement.

For a story on Vanke’s annual general meeting, click here.

China Resources was Vanke’s biggest shareholder until Baoneng emerged from obscurity last year with a larger stake bought through two units, in a move Vanke management labeled as a “hostile takeover.”

Employees of Vanke protested at the city government in Shenzhen Thursday, claiming they were facing their largest crisis as shareholders fought for control, and accused China Resources and Baoneng of joining forces against the firm, according to reports by news portal Sina.com.

Some of its employees voluntarily went to submit a petition letter to the authorities, and Vanke’s management tried to persuade them to return to work, Vanke said in an e-mailed response to Bloomberg News queries, adding it will try its best to maintain normal operations.

The company’s management was under “mounting” pressure, as the ownership tussle prompted banks and rating companies to “seriously” review the company’s credit risks and projects and contracts are at risk of termination, President Yu Liang said on Monday.

— With assistance by Emma Dong

Before it's here, it's on the Bloomberg Terminal. LEARN MORE