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Shenzhen Metro becomes Vanke's top shareholder
Published on: 2017-06-12
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042As China Evergrande Group signs a groundbreaking share transfer deal with the Shenzhen Metro Group, Vanke's situation has become clearer after a two-year dispute with major shareholders.


Domestic developer China Evergrande Group signed a deal to transfer 14.7 percent of the shares it owns in China Vanke Co to Shenzhen Metro Group on Friday.


The deal makes the latter Vanke's largest shareholder with a stake of 29.38 percent.


This means that Vanke's two-year share dispute with its former largest shareholder has come to an end.


China Evergrande sold all its shares in Vanke to Shenzhen Metro for 29.2 billion yuan, the developer said in a statement posted on the Hong Kong Exchanges and Clearing website.


Financial conglomerate Baoneng Group is now the second-largest shareholder, holding 25.4 percent of the developer's shares.


The share dispute over Vanke began in mid-2015, when Shenzhen Jushenghua and Foresea Life Insurance, two units of Baoneng, started to build up stakes in Vanke. The group subsequently continued to buy shares of Vanke and became the developer's largest shareholder on December 7, 2015, with a stake of 20 percent, according to a statement by Vanke on the same day.

041
However, Vanke Chairman Wang Shi had a hostile attitude toward Baoneng and even called it a "barbarian," . The dispute persisted for the past two years.


On December 5, 2016, the China Insurance Regulatory Commission ordered Foresea Life Insurance to suspend universal life insurance business, curbing Baoneng's source of capital increases that it had often used to buy stakes in listed companies, Beijing Business Today reported the same day.


As the high-profile dispute among Vanke's major shareholders and its management ends, the company's management board election becomes the next major uncertainty.


The game among Shenzhen Metro, Baoneng and Vanke's management and the (board) will influence the developer's future.

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