Shenzhen Exchange Asks Vanke to Identify Source of Share Purchase Leak
Yicai Global
/SOURCE : Yicai
Shenzhen Exchange Asks Vanke to Identify Source of Share Purchase Leak

(Yicai Global) Aug. 10 -- Shenzhen stock exchange has asked China's largest real estate developer China Vanke Co. [SHE:000002] to clarify the source of leaked information regarding the purchase of its equity by China's second-largest developer Evergrande Group on Aug. 4, leading to wild swings in the company's share price.

Vanke has responded by saying that none of its staff leaked information about the share purchase.

Evergrande also issued a statement saying that, "Neither the company nor our directors, supervisors, senior managers or spokesperson have ever accepted an interview with the press, and neither have we authorized any person to release any information or news denying the purchase of shares in Vanke by the company or by Chairman Xu Jiayin."

When news broke in financial media on Aug. 4 that Evergrande had bought a 2 percent stake in Vanke, Vanke's share price rose over 5 percent within 10 minutes of the news, peaking at a 9 percent gain. Later in the afternoon, the press reported that Evergrande denied the share acquisition and Vanke's share price took a dive back to a gain of 5 percent. This was followed by further uncertainty during the day's trading.

In fact, the Guangzhou-based company spent CNY9.11 billion to acquire 4.68 percent of equity in Vanke at an average price of CNY17.63 per share, according to a statement issued by Evergrande in Hong Kong on Aug. 4.

Vanke has been at the center of a protracted public power struggle since last year, trying to prevent a hostile take-over by its biggest shareholder Shenzhen Baoneng Investment Group Co.

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