(Yicai) Oct. 23 -- Wanda Group has been slapped with a payment demand for CNY5 billion (USD701.6 million) worth of share buyback fees that its previous partner, retailer Suning.com, claims it is owed by the cash-strapped Chinese property giant.

Suning.com has raised arbitration against Wanda, saying that it is owed these funds as Wanda breached a co-operation deal signed by the two parties in 2018, Beijing-based Wanda said yesterday.

Suning’s share price [SHE:002024] soared by the exchange-imposed limit of 5 percent today, closing up 5.1 percent at CNY1.62 (USD0.23) apiece. Stocks of companies that are regarded to be at risk have a trading limit of 5 percent, while that of normal stocks is 10 percent.

No further information was given about the alleged contract breach. But the Nanjing-based retailer said its arbitration request has been accepted by the China International Economic and Trade Arbitration Commission and it is pending the launch of a court trial.

Wanda’s property management arm Wanda Commercial Management Group went public in Hong Kong in 2014, but the firm’s founder, Wang Jianlin, thought that the stock was undervalued soon after its flotation. In September 2016, Wang took the firm private to prepare for a listing on the mainland.

As part of the privatization deal, internet giant Tencent Holdings, Suning Commerce Group, Sunac China, and e-retailer JD.com spent CNY34 billion (USD4.8 billion) to purchase a 14 percent stake in Wanda Commercial Management, Wanda said in January 2018. Of this, Suning paid CNY9.5 billion (USD1.3 billion) for a 4 percent stake.

Another Wanda affiliate, Yonghui Superstores, was slapped with a similar demand notice a week ago. Dalian Yujin Trading is seeking CNY3.6 billion (USD505 million) worth of stock transfer fees and CNY218 million (USD30.6 million) in contract-breach damages from Yonghui Superstores, the Fuzhou-based supermarket chain said on Oct. 13, citing the notice it received from the Shanghai International Economic and Trade Arbitration Commission, informing it that Yujin Trading’s application had been accepted. Wang Jianlin holds joint liability for this fee.

Editors: Liao Shumin, Kim Taylor