Embattled Vanke chairman Wang Shi no stranger to headlines
Real estate tycoon has sought to portray himself as a self-made entrepreneur, leaving out fact father-in-law was Guangdong’s deputy party chief
Over the course of three decades, real estate tycoon Wang Shi has sought to portray himself in the media as an idealistic, self-made entrepreneur.
After forming China Vanke, now China’s biggest home builder in 1984, he gave up his share ownership when the company went public in 1991, later choosing to become a professional manager.
While the business boomed, he handed actual power to another man, the company’s president Yu Liang, and became board chairman.
Already in his 60s, he led a young person’s lifestyle, climbing mountains, rowing and studying. Most controversially, he also started dating an actress 30 years his junior.
The most often repeated part of the media hagiographies was that he never bribed officials. His company also refrained from hoarding land or bidding up prices, common practices in the industry, Wang claimed in many public speeches and interviews.
He made his first bucket of gold trading corn from northeastern China to Shenzhen in the 1980s, the story went, neglecting to mention he was also the son-in-law of a senior provincial party official.
This month’s takeover attempt by Baoneng Group is not the first time Wang’s seat of power at Vanke has come under threat.
In 1994, several of Vanke’s major shareholders led by Junan Securities, which merged with Guotai Securities to form what is now Guotai Junan Securities in 1999, launched a fight for control by issuing a letter to all shareholders, suggesting a restructuring of Vanke’s business and management team.
At a press conference, Junan said Vanke’s business structure, which then covered a wide range of areas, “decentralised the company’s resources and distracted the management’s focus”.
It urged Vanke to restructure its business and management, and recommended eight to 10 directors to the then 14-member board.
Wang won the battle, after a three-day suspension of share trading, by talking the key members of the alliance out of the takeover attempt.
He accused Junan of rat trading – collaborating with other parties to take advantage of a client by not executing orders at the best price – and submitted evidence to the securities regulatory commission, which launched an investigation and made Junan abandon the restructuring plan.
In his book The Road and the Dream, Wang, now 64, said he was “totally unaware” back then that the “barbarians” had been waiting at Vanke’s gate for a long time.
Last week’s support from Anbang Insurance Group eliminated the immediate possibility of Baoneng taking control of Vanke’s board, but many say the hazard lingers.
After saying Baoneng’s Yao Zhenhua “lacked credibility”, Wang was widely accused of seeking to morally blackmail his rival.
Yao’s background was also dug out as the two men’s battle continued. Zeng Baobao, founder of Shenzhen-based financial holding group Fantasia, said 45-year-old Yao used to make a living by frying dough sticks, a popular Chinese snack known as youtiao.
He was also reported to be a vegetable vendor, and much of the land he bought later for development was acquired as part of a government project to secure the supply of vegetables.
An online post by the alumni community of South China University of Technology later fired back that Yao studied at the university between 1988 and 1992, and graduated with two bachelor degrees, one in industrial engineering and management and the other in food engineering.
It highlighted Yao’s diligence when studying, saying this explained his ability to build a comprehensive enterprise now covering “almost every industry”.
Before establishing Baoneng, Yao’s company was Xinbaokang Real Estate Development, which was established as Xinbaokang Vegetable in 1997.
Vanke listed in Shenzhen in 1991 but was a company without an actual controller after Wang and his team sold their stake in 2000 to China Resources, the biggest shareholder before Baoneng’s recent moves.
China Resources never held more than 20 per cent of shares and nor did it intervene much in Vanke’s operation, suggesting some sort of tacit understanding.
Vanke started off as a trader of animal feed in 1984. Last year in notched up 215 billion yuan (HK$256.8 billion) in real estate sales, making it a major global player.
It began investing overseas in 2013, and now has six real estate development projects in Hong Kong, Singapore, New York and San Francisco.
In a speech at a forum in Nanjing last year, Wang said he became an engineer at the Guangzhou railway bureau in the early 1980s after graduating from university in 1977.
He moved to Shenzhen in 1983, starting as an employee at a state-owned enterprise dealing feed.
Wang has repeatedly told the media he managed to transport corn from northern China directly to Shenzhen instead of the traditional way of transferring via Hong Kong, making 3 million yuan within eight months.
In 1988, when Vanke was reformed as a joint-stock operation, Wang gave his stocks to a charity fund, although be was believed to have retained ultimate ownership of most of them. One major reason he cited for establishing the charity fund was that he started his empire on the basis of a state-owned enterprise.
“I used to work for an SOE,” he told a seminar earlier this year. “The wealth I created didn’t belong to me. In other words, I was only managing money for the country and the people.”
He added that it was dangerous to suddenly have such a large sum of money back then, a time when people hated inequality more than poverty.
“Someone who got rich overnight could be in danger, probably even be killed … and I didn’t know what to do with so much money,” he said.
In the early days. Vanke covered a wide range of business, from exports to retail, before starting to focus on real estate in 1993.
What Wang did not mention was his well-off family background. He was married to the daughter of the then deputy Communist Party boss of Guangdong province, Wang Ning.
The connection lasted until a few years ago, when Wang divorced his wife of over 40 years and started dating the then 31-year-old actress Tian Pujun, after meeting her in an executive MBA class.
In 1999 Wang resigned from the position of general manager of Vanke and handed power to Yu Liang, who left a major SOE in Shenzhen and joined Vanke in 1990.
Yu’s first impression of Wang was “idealistic, and strictly self-disciplined”, mainland magazine China Entrepreneur quoted Yu as saying.
Wang started climbing mountains after the resignation, becoming the oldest Chinese to reach the summit of Mount Everest. He also climbed the tallest mountains of the other continents in the next five years.
In 2011, he started studying at the top universities in Europe and America, including Cambridge and Harvard.
Many said Wang’s high-profile adventures in nature, academia and romance were one of the reasons he was on the verge of losing control of the company.
Feng Lun, founder of another mainland property developer, Vantone, once wrote in a book that a business is not far from death once its boss starts dating female stars.