(Yicai Global) June 29 -- China Vanke Co.'s [SHE:000002] major shareholders voted against its 2015 board and supervisory committee reports at the company's annual general meeting yesterday in the latest round of an ongoing struggle for control of China's biggest property developer.
A day earlier, Shenzhen Jushenghua Co. and Foresea Life Insurance Co., which together are effectively Vanke's second-biggest investor and are both opposed to a CNY45.6 billion (USD6.87 billion) stock issue plan that would dilute their holdings, had proposed an extraordinary general meeting to depose the company's entire 12-member board, including celebrity founder and chairman Mr. Wang Shi.
The tussle for control of the Shenzhen-based blue-chip company has been one of the biggest corporate news stories in China. Shenzhen Baoneng Investment Group Co., which controls Jushenghua and Foresea Life, has been snapping up shares in Vanke since last July, becoming its biggest investor in December with a 20 percent stake.
Shareholders who rejected the two reports "should disclose their reasons," Chairman Wang said. "Such a rejection of the management's efforts has affected the management team."
Mr. Wang has described Baoneng's buying spree as an act of "barbarians at the gates," and has been trying to thwart the insurance and investment giant's hostile takeover bid. On June 17, Vanke announced a plan to issue 2.87 billion A-shares to Shenzhen Metro Group Co., making the subway operator its majority shareholder and diluting the equity of existing stockholders.
Facing a dilution of its 15.24 percent stake in Vanke, China Resources Co. is standing together with Baoneng Group in opposing the new plan. China Resources is Vanke's second-largest shareholder. Judging by the votes, it is extremely likely that Baoneng and China Resources voted against the reports, according to a shareholder present at yesterday's AGM. They have a combined shareholding of more than 40 percent.
On June 27, the Shenzhen Stock Exchange issued a letter of concern to Baoneng and China Resources, ordering them to explain their actions and confirm whether or not they are acting together.
Shareholders overwhelming approved Vanke's annual and financial reports, annual profit and dividend distribution proposals, and reappointment of its accounting firm.