(Yicai Global) Jan. 30 -- China Vanke Co. has referred Shenzhen Jushenghua Ltd. to the securities regulator, saying the company illegally holds Vanke shares, asking its seven expired asset management plans should be liquidated or should not be renewed. The case represents the latest chapter in the history of takeover and ownership issues between Vanke and Jushenghua's parent company Baoneng Group.

Liu Shuwei, an independent director of China Vanke [SHE:000002], wrote a letter to Liu Shiyu, chairman of China Securities Regulatory Commission, or CSRC, complaining about Jushenghua, a property and insurance business firm affiliated to Baoneng Group. 

In 2015, Jushenghua collaborated with Foresea Life Insurance, another subsidiary of property and financial services conglomerate Baoneng, through its asset management plans to purchase Vanke shares from the secondary market. However, CSRC ruled that Baoneng affiliates' purchase of Vanke shares violated regulations.

Jushenghua holds a total of 10.34 percent of Vanke shares through nine asset management plans, with a leverage ratio of 2x. Seven of these nine plans expired last November and December, accounting for 6.89 percent of Vanke shares. According to relevant rules, the seven expired asset management plans should have been liquidated a year earlier, November and December 2016, and not renewed, said Liu in the letter.

Vanke is a blue-chip stock in the A share market and is widely sought-after among institutional investors and small and medium investors. Jushenghua's illegal holding of 6.88 percent of Vanke shares hurts the interests of investors, especially smaller investors, said Liu.

The share price of Vanke plummeted today. By 4 p.m., it had fallen by 5.73 percent to CNY36.36 (USD5.73).

Of these seven asset management plans, the first took effect on Nov. 24, 2015, and the latest expired on Dec. 10, 2017. During this period, Vanke's share price rose from CNY13.04 to CNY29.82, with the peak being CNY33.40 and the bottom being CNY12.63, which occurred on Nov. 24, 2015. In the preceding year, its share price was traded at below CNY13.