Baoneng Group is discovering the challenges of being China’s first corporate raider this week as its takeover target accuses the Shenzhen conglomerate of illegal fund-raising. Meanwhile, another Shenzhen developer has shed its auditor rather than hand over the details of its deals, and mainland developers push their way into Hong Kong. Read on for all these stories and more.
Margin Calls Threaten Baoneng’s Vanke Stake
Baoneng boss Yao Zhenhua built his Vanke stake on high interest financing
Baoneng Group faces the forced liquidation of its investment in China Vanke unless it can meet impending margin calls on its borrowing — in a demonstration of the risk of using leverage to build a stake for a hostile bid.
In recent weeks, Baoneng’s fight for control of Vanke, China’s largest residential developer, has fascinated the country’s financial community. Vanke chairman Wang Shi had previously branded the private owners of Baoneng as “barbarians”, warning that a takeover by them would wreck Vanke’s corporate culture. Read more>>
Vanke Accuses Baoneng of Illegal Fund-Raising
China Vanke fired the latest salvo in its takeover battle with Baoneng Group on Tuesday, after filing a open letter with the securities regulators, accusing its largest shareholder of illegal fund raising as it increased its stake over the past six months in the housebuilder.
Vanke’s A-shares have now tumbled almost 30 per cent since they resumed trading on July 4. Read more>>
PwC Quits on Kaisa as Developer’s Books Go Unaudited
Repentance doesn’t come easy in the world of Chinese defaulters.
Embattled Chinese property developer Kaisa Group is a case in point. It defaulted on $2.5 billion of bonds in 2015, its stock has been suspended for over a year, and it hasn’t filed an audited yearly financial report since 2013.
Now it has gone and terminated its auditor PricewaterhouseCoopers. The ostensible justification is that PwC says it can’t complete the 2014 audit by the end of this year. Read more>>
Big Mainland Developers Push into Hong Kong
China’s property developers are aggressively bidding for prime public land in Hong Kong as competition heats up in a sector where Asia’s wealthiest tycoons built their fortunes.
For decades, large conglomerates controlled by Hong Kong’s richest families have ruled the city’s real-estate market, having developed the tall office towers that dot the iconic skyline to the endless rows of residential apartment blocks. Read more>>
HK Developer is First Fined for Dodgy Sales Tactics
A local property developer was fined HK$200,000 by a Hong Kong court after admitting a string of malpractices that included an omission in its sales brochures about the presence of public toilets and a power plant near the housing development.
The case marked the first successful prosecution under the Residential Properties (First-hand Sales) Ordinance, which came into effect more than three years ago, as Oriental Style Limited pleaded guilty to 13 summons charges before principal magistrate Ernest Lin Kam-hung at Kwun Tong Court. Read more>>
Mainland Buyers Targetting High End Properties
China’s luxury housing market continues to boom, despite government measures to slow it down, which has stimulated developers to bid even higher in big cities for prime plots of land, in an effort to target wealthy buyers.
June transactions for villas, and new apartments priced above 70,000 yuan per square meter, in Beijing hit new record highs, according to property consultancy Yahao. Read more>>
Tune in again tomorrow for more news, and be sure to follow @Mingtiandi on Twitter for headlines as they happen.
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