CSRC Reprimands Vanke Management, Shareholders on Dispute

  • Urges parties to resolve dispute as soon as possible
  • Regulator says behavior tarnishes company, threatens stability

China’s securities regulator waded into the country’s most high-profile corporate battle, urging property developer China Vanke Co. and its biggest shareholders to resolve their dispute as soon as possible.

The regulator reprimanded shareholders and management, saying their behavior ignored market stability and tarnished the company image, China Securities Regulatory Commission spokesman Deng Ge said at a regular briefing in Beijing on Friday.

“It’s a pity that we still haven’t seen the Vanke shareholders and management taking sincere, effective measures to resolve differences,” Deng said at the briefing. “On the contrary, they’ve been escalating the conflict in various ways.”

Vanke, the nation’s largest publicly traded developer, asked the Chinese stock regulator to investigate its largest shareholder, Baoneng Group, for alleged misconduct and illegal acts earlier this week. It has been embroiled in a tussle for control since last year, when Baoneng, until then an obscure conglomerate, displaced China Resources (Holdings) Co. as the developer’s largest stakeholder. At the time, Vanke’s management labeled it a “hostile takeover,” and later formed a share sale plan that was widely viewed by analysts as a way to dilute Baoneng’s ownership.

China Resources joined Baoneng in opposing Vanke’s $6.9 billion share sale plan to tie up with public transit operator Shenzhen Metro Group. Together, the two shareholders own more than 40 percent of the firm’s stock.

Vanke shares traded in Shenzhen have tumbled almost 29 percent after they resumed trading July 4 following a six-month halt. The shares rose 2.2 percent on Friday.

— With assistance by Dingmin Zhang

(Updates with comment in third paragraph.)
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