Shares of China’s Vanke resume trading after 6 months

Shanghai, Jul 4 (efe_epa). —  Trading of shares of privatelyowned Vanke, China’s biggest residential property developer, resumed at the Shenzhen and Hong Kong stock exchanges on Monday (from where it was removed on Dec. 18) and fell by the 10 percent daily limit before midsession.

The Chinese exchanges in Shanghai and Shenzhen have a mechanism to prevent huge crashes or speculative bubbles in one day (quotation is suspended for any firm that swing more than 10 percent daily upward or downward), but not Hong Kong, where, after an initial fall, Vanke gained up to 8.28 percent Monday morning.

Vanke founder Wang Shi had withdrawn the company from both stock exchanges in December amid an internal battle for control of the company, after investment firm Baoneng effected a hostile purchase of Vanke shares to become its largest shareholder.

Vanke’s suspension for three months, for alleged “asset restructuring” (which is yet to take place), was renewed on March 18 for another three months with Baoneng’s approval, and then again on June 19.

Around this time, Wang announced that the restructuring of assets in question will be Vanke’s acquisition of Qianhai, a real estate subsidiary of the stateowned Shenzhen Metro, or SZMC, in exchange for shares in the company, which would dilute the present distribution of shares and make SZMC its largest shareholder after Baoneng.

The plan was rejected by Baoneng who proposed a vote to remove Wang and another 11 directors from the board and by its second largest shareholder, China Resources, which would also be affected by the SZMC acquisition, but which ruled out Wang’s expulsion.

The vote was carried out Friday and Wang and the executives retained their posts as well as the deal with SZMC that was announced in June, in place, allowing for the company’s return to the stock exchange, although the internal battle remains unresolved.

This would also explain the drastic fall of the shares by the 10 percent daily limit at Shenzhen, shortly after trading began, following six and a half months of uncertainty for Chinese investors, who were eager to sell off their shares of the real estate company.