(Yicai Global) Feb. 7 -- The court has not yet given a verdict on the lawsuit between China Vanke Co. [SHE: 000002] and its major shareholder Baoneng Group, several lawyers said. Reports last night that the court deemed Baoneng's purchase of Vanke's shares invalid were incorrect.
The court has only ruled on an objection raised by the defendants regarding the court's jurisdiction, legal professionals explained to Yicai Global. It is unlikely that the court's final decision will support Vanke labor union, they added. The buy up will not be ruled invalid because of an untimely information disclosure, as this would undermine market rules, the lawyers said.
Vanke labor union sued the property developer's major shareholders, Shenzhen-based Jushenghua Co. and Foresea Life Insurance Co., and took issue with a series of Baoneng Group's wealth management programs in Luohu District People's Court in Shenzhen last July. The labor union asked the court to rule the purchase of Vanke's shares invalid for impairing the interests of the company's shareholders, as the defendants failed to fulfill the obligation of information disclosure in accordance with relevant laws and regulations.
Vanke was once China's largest real estate developer. Good financial position, decentralized ownership structure and low proportions of shares held by major shareholders and main management staff at the company caught the attention of capital 'barbarians.' External insurance funds, represented by Baoneng Group, began to buy Vanke's shares aggressively in the secondary market in 2015. Although irregularities in the process were found, Baoneng Group, controlled by Chinese businessman Yao Zhenhua, quickly became Vanke's top shareholder. The move was met with strong resistance from Vanke founder Wang Shi and its management. A final decision has not been made in the parties' fight for control of Vanke.