Money Matters | Return of the Party ghost spooks Chinese corporates
Vanke takeover battle is a clear example of how the Communist Party is increasingly stepping into corporate shoes
What should have made headlines in the scramble for the control of China’s top developer China Vanke is not whether its founder Wang Shi would survive. It is clear that his days are over.
Neither is it about who will win. It is a trade-off among the major shareholders’ backers for control. Though the result will tell who will gain control, it will not give any inkling on who the ultimate winner would be.
But what is really alarming is the direct interference of the Communist Party in a battle that is essentially a commercial transaction in a non-state owned company and in a non-strategic industry.
According to mainland media, the Party committee of China Resources met a day before its board meeting and decided to oppose a defence plan proposed by Vanke’s management. Three CRC representatives subsequently voted against the plan to fend off hostile bidder Baoneng Group in the Vanke board meeting last week.
To many business leaders, this was akin to turning the clock two decades back to when China’s state sector reform started. It also proves that what the State-owned Assets Supervision and Administration Commission (Sasac) said, in an early article about giving the Party a say in corporate matters, is not just lip service.