(Yicai Global) Dec. 13 -- A dispute between China Vanke Co. [SHE:000002], the country's second-biggest property developer, and Shenzhen Zhongheng Huafa Co. [SHE:000020] over a plot of land in China's hottest real estate market has escalated.
Huafa and Vanke are clashing over land assigned to Huafa for redevelopment in Shenzhen's Guangming district. The companies signed a deal in August last year to work together on the project, but it failed to go ahead as five tenants refused to move out.
Now, Huafa said it has signed an agreement with a unit of Shenzhen Overseas Chinese Town Co. [SHE:000069] covering rebuilding of the Huafa industrial area located on Gongming Street. Vanke argues that the OCT deal does not have legal force as its own contract is still in effect and Huafa is now suspected of double selling.
Huafa insists that it has not signed any agreement regarding the project, so the accusation of double selling is baseless. The company said it "will do whatever it takes to cancel the contract with Vanke, including taking legal action."