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UPDATE 2-China Vanke's largest shareholder says will not interfere in operations
June 30, 2017 / 10:11 AM / 5 months ago

UPDATE 2-China Vanke's largest shareholder says will not interfere in operations

* “Will not interfere in Vanke’s operation” - Shenzhen Metro

* Sees 2017 company sales higher than 2016 - Vanke

* Yu Liang to replace Wang Shi as chairman (Adds Vanke’s statement on appointment in paragraph 7)

By Clare Jim

HONG KONG, June 30 (Reuters) - China Vanke Co’s largest shareholder, Shenzhen Metro Group, said it would not interfere in the property developer’s operations, allaying concerns the company would become less market driven under the control of the state-run firm.

The subway operator’s control over China’s second largest property developer was affirmed this month after it raised its stake to 29.38 percent, ending a bitter struggle for boardroom control by surpassing financial conglomerate Baoneng Group that had sought to oust Vanke’s management.

Some current and former employees have said that Vanke, since it started talks with Shenzhen Metro last year, has gradually been adopting some practices that pointed to it becoming more like a state firm.

“We will carry out our role as a cornerstone investor,” Shenzhen Metro Chairman Lin Maode said at a Vanke shareholder meeting in Shenzen on Friday. “We’ll be a long-term strategic investor and safeguard Vanke’s interest.”

Lin and two other senior executives from Shenzhen Metro were approved as Vanke’s non-executive directors at the meeting. Vanke said it did not receive any director nomination from Baoneng, which still has a 25 percent stake.

Vanke’s founder Wang Shi, 66, announced last week he would step down from the board as chairman after the years-long corporate power struggle came to end.

Vanke said in a statement on the Shenzhen stock exchange late on Friday that the company board had elected President Yu Liang, a 28-year Vanke veteran, as chairman and CEO, while Wang will become emeritus chairman.

The property developer will work more closely with Shenzhen Metro in the future, Yu said at the shareholders meeting.

Vanke has been stepping up efforts to implement a ‘railway plus property’ strategy in China’s Tier 1-2 cities, which involves building properties around railway networks.

Yu said he expects Vanke’s 2017 sales to be higher than a year ago, which were at 228.9 billion yuan.

Home prices levelled off in China’s biggest cities in May but continued to climb nationwide, indicating demand remains resilient despite a series of government measures to keep the market from overheating.

On Thursday, Vanke won an auction to buy the equity interests and creditors’ rights of companies holding assets including 16 land parcels in the southern city of Guangzhou for 55.1 billion yuan ($8.13 billion). (Reporting by Clare Jim; Additional reporting by Meg Shen; Editing by Himani Sarkar)

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