Vanke's 2nd largest shareholder opposes plan to oust all directors

Salespeople promote China Vanke property projects in Fuzhou, Fujian province.[Photo/VCG]

China Vanke Co Ltd's second-largest shareholder China Resources Group said on Thursday that it opposed plans by Baoneng Group to oust the property developer's board and had not reached any agreement with the largest shareholder on voting.

The financial conglomerate Baoneng is seeking the removal of Vanke's board－a move it made after Vanke's management announced a $6.9 billion deal with Shenzhen Metro Group earlier this month to dilute the holdings of Baoneng and State-owned China Resources.

Shares of Vanke in Hong Kong jumped 4.25 percent, compared with a 1.75 percent gain on the broader Hang Seng Index. Vanke's shares in Shenzhen have been suspended since Dec 18.

China Resources said on Thursday it had a different opinion on the proposal to oust the property developer's board and would restructure the boards of directors and supervisors.

China Resources also responded to Shenzhen Stock Exchange's inquiry on Thursday that it had not reached any agreement with Baoneng on voting.

Baoneng responded to the Shenzhen Stock Exchange's inquiry on Thursday that it put forward the proposal to solve the problem of chaotic governance in the company as well as give all shareholders an opportunity to nominate its directors and supervisors.

"China Resources' decision on Vanke is wise because Chairman Wang Shi's problem cannot be the problem of all of its directors, and the second-largest shareholder wants to see Vanke's corporate power struggle resolved smoothly because it is good for all shareholders," said Liu Jipeng, dean of capital finance institute at the China University of Political Science and Law. Liu said Baoneng's proposal to oust the property developer's board is naive and it is not possible to change all the board of directors.

"If Yu Liang, the president of Vanke, can be the new chairman, it may be accepted by China Resources and Wang Shi," said Liu.

On Thursday morning, some Vanke employees presented a petition against the proposal to oust board at Shenzhen's office of letters and calls.