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China Vanke says no deadline for meeting to select new board
March 26, 2017 / 11:43 AM / 8 months ago

China Vanke says no deadline for meeting to select new board

HONG KONG (Reuters) - Property giant China Vanke Co (2202.HK) 000002.SZ, the subject of a protracted battle for boardroom control, said on Monday it has no time frame set to select a new board as various parties are discussing proposals, although the makeup of its board is a key focus.

FILE PHOTO: Employees walk past a logo of Vanke at its headquarters in Shenzhen, south China's Guangdong province, November 2, 2015. REUTERS/Tyrone Siu/File Photo

Company Secretary Zhu Xu made the comments after Vanke reported on Sunday a 19 percent rise in 2016 core profit to 20.9 billion yuan ($3.04 billion), helped by record sales, but missed analysts’ estimate of 21.1 billion yuan, according to Thomson Reuters data.

The company’s Hong Kong-listed shares fell 4.6 percent.

The tenure of Vanke’s current board members expires this month. The company has yet to set a meeting to elect new directors but its rules allow the current board to serve until a new one is formed.

The property giant has been in crisis since late 2015 as financial conglomerate Baoneng Group built up a 25 percent stake to become its largest shareholder and sought to oust management.

But last week Vanke said state-owned Shenzhen Metro Group, a key ally, became its largest shareholder in terms of voting rights after a proxy agreement with its third-biggest shareholder, paving the way for the metro operator to take control of the homebuilder.

Vanke said in a statement on Sunday Baoneng had promised to maintain Vanke’s independence and would not use its position to hurt the developer’s interests.

Vanke President Yu Liang said on Monday Shenzhen Metro will also support the developer’s mixed ownership.

“As a cornerstone investor, it will support Vanke’s development. If Vanke hasn’t done anything wrong with its management, there’s no reason to change,” Yu said when asked about Shenzhen Metro’s growing influence inside Vanke.

“In China’s Tier 1-2 cities, ‘railway plus property’ strategy will be a major model... some countries in One Belt, One Road have also invited us to explore railway opportunities,” he added, referring to China’s New Silk Road plan.

The company said China’s property sector tightening would help sustain healthy development, and the latest measure - to curb the purchase of new commercial property in Beijing by individuals - would have little impact on its commercial property.

Beijing has stepped up efforts to cool the market, raising home purchase requirements and imposing price limits.

Vanke reported 16 percent rise in 2016 net profit to 21 billion yuan and a 24 percent rise in revenue at 228.9 billion yuan.

Reporting by Clare Jim; Editing by Anne Marie Roantree and Amrutha Gayathri

Our Standards:The Thomson Reuters Trust Principles.
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