China Vanke Co (萬科) chairman and chief executive officer would both resign in an abrupt move after the embattled developer warned of a record 45 billion yuan (US$6.2 billion) loss for last year.
Chairman Yu Liang (郁亮) applied to resign due to “work adjustment reasons,” but would remain as a director of the company, Vanke said in a filing to the Hong Kong stock exchange yesterday.
Chief executive officer Zhu Jiusheng (祝九勝) is also stepping down, citing “health reasons.” He would no longer hold any positions at the company.
Photo: Reuters
Shenzhen Metro Group Co (深圳市地鐵集團) chairman Xin Jie (辛杰) would replace Yu. The state-owned subway operator is Vanke’s largest shareholder.
The developments underscore the sense of alarm at the Shenzhen-based developer, which has taken center stage in China’s prolonged property slump after dozens of its peers defaulted.
Vanke risks a similar fate as it faces a wall of debt repayments at a time when losses are widening and home sales continue to tank.
The preliminary net loss is the developer’s first on an annual basis since its 1991 listing and more than doubles analysts’ projections for a loss of 21.8 billion yuan, data compiled by Bloomberg showed.
The full-year amount includes a 17.9 billion yuan loss in the first nine months of last year, suggesting operations worsened significantly during the final quarter even as the government unveiled its biggest package to revive the housing market.
Before joining Vanke, Zhu spent 19 years at state lender China Construction Bank Corp’s (中國建設銀行) Shenzhen branch. With a doctoral degree in economics, Zhu joined the developer in 2012, first as a senior vice president and later overseeing finance operations. He spearheaded new businesses including China’s first public real estate investment trust, underpinned by Vanke’s office buildings.
In 2018, he took over the president and chief executive officer roles from Yu, who shifted his focus to Vanke’s long-term strategy. In a media briefing that year, Yu described Zhu as a bookworm and outspoken within the company.
A graduate of Peking University, Yu joined Vanke in 1990, two years after the developer began to transform itself from a trading firm into a real estate juggernaut.
After overseeing the company’s stock listing and investments in his early years, Yu worked as the general manager for 16 years. In 2017, he took the presidency role from founder Wang Shi (王石) after an ownership tussle that ended with a state entity becoming its biggest investor.
In later years, Yu dominated Vanke’s diversification into non-traditional businesses, including rental apartments and logistics, as China’s urbanization entered its later stage.
The company was forced to exit non-core operations and divest assets last year as the property downturn dragged on.
Just like his predecessor, Yu has climbed Mount Everest and run marathons, local media has reported.
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