Vanke’s largest shareholder says it will stay out of daily operations
Shenzhen Metro says it has no plans to be involved in the developer’s daily operations, as a new board with three Metro executives was elected on Friday
Shenzhen Metro Group said the company had no plans to be involved in China Vanke’s daily operations at the Chinese developer’s annual general shareholders’ meeting in Shenzhen on Friday.
“We will not have a hand in Vanke’s day-to-day operations, but will play our part as the cornerstone shareholder,” chairman of state-owned Shenzhen Metro, Lin Maode told Vanke shareholders.
“We respect Vanke’s culture, its management team and the company will maintain its mixed ownership. It will not become a state-owned enterprise,” he said.
Vanke, China’s second-largest homebuilder, elected a new board on Friday after the shareholders’ meeting had been postponed for three months as its high profile shareholders fought for control of the company.
The near two-year battle ended this month after state-owned Shenzhen Metro, which supports Vanke’s current management, surpassed raider Baoneng Group to become the Shenzhen developer’s largest shareholder with a 29.38 per cent stake.
Three Shenzhen Metro executives were newly elected to the company’s 11-member board, including chairman Lin.
Wang Shi, 66, Vanke’s founder and current chairman, exited the board and stepped down as chairman. The baton was passed to president Yu Liang, who was also elected the new chairman at the meeting.
Yu, together with Vanke’s executive vice presidents Wang Wenjin and Zhang Xu, are among the new board members. Baoneng, which has 25.4 per cent stake, did not attend the shareholders’ meeting nor have a seat in the new board.
Shenzhen Metro said it had negotiated with Baoneng ahead of the meeting about the board election and Baoneng “supported”the election plan.
Vanke had been fending off hostile takeover attempts from financial conglomerate Baoneng and rival China Evergrande since December 2015.
Evergrande sold its stake in Vanke to Shenzhen Metro this month, helping the latter become the biggest shareholder.
Wang’s exit, Shenzhen Metro’s takeover and Baoneng’s walking away from board officially mark the end of the 18-month takeover tussle that had shaken the country’s capital market and redefined the rules of corporate China.
With the backing of Shenzhen Metro, Vanke’s Yu said the developer would expand its property projects atop subway lines in cities across China.
“The next 10 years will be the golden age for metro development in China, the government has approved 58 cities to build subways, many of the cities want to cooperate with Vanke,” Lin added.
The subway operator and Vanke are also jointly developing a property project in Cairo, Egypt along its urban rail.
Vanke’s contracted sales in the first five months amounted to 228 billion yuan, rising 54 per cent from a year ago.
Yu said Vanke 2017 sales would be better than 2016 and their market share might double to 6 per cent from current 3 per cent by the end of the year.
Vanke’s shares in Shenzhen dipped 0.76 per cent to 24.97 yuan, and its Hong Kong shares was also down 0.23 per cent to HK$22.1 on Friday.