AsianFin -- Concerns over China Vanke Co. intensified following questions about the status of its top executive and reports suggesting a potential takeover by state authorities.
Chief Executive Officer Zhu Jiusheng reportedly responded to a call from a reporter at Cailian, hours after The Economic Observer claimed he had been taken into police custody. Zhu also made a promotional post about Vanke’s rental apartment business on the social media platform WeChat early Friday, attempting to address uncertainties.
The reports triggered a sharp market reaction, with Vanke’s shares plummeting as much as 8.9% in Friday morning trading in Hong Kong. Its bonds also saw declines, reflecting heightened investor anxiety.
China Vanke has been under scrutiny since the beginning of the year as it grapples with a significant debt burden. Despite a series of government measures to support the struggling property sector, Vanke’s home sales have continued to decline. Once considered a cornerstone of the industry with strong government ties, the company’s future remains uncertain as Beijing has yet to clarify its position on the developer.
Adding to the turmoil, The Economic Observer reported on Thursday that a task force from the Shenzhen municipal government, where Vanke is headquartered, has stepped in to manage the company’s operations. The report suggested that Vanke could face a takeover or restructuring, raising further questions about its stability.
Shenzhen Metro Group Co., Vanke’s largest shareholder, may play a pivotal role in the company’s future as developments unfold.
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