China Business Daily (Reporter Wang Yifei) On April 14, Vanke held an investor relations exchange meeting, in response to the recent negative public opinion on the moral hazard of Vanke's management, Vanke said that "there is no management seeking personal gain", but Vanke also mentioned that "at present, Vanke has indeed encountered phased operating difficulties, and cash liquidity is under pressure in the short term." ”
△The picture shows the real estate development project of Vanke New Metropolis. (PHOTO COURTESY OF CNSPHOTO)
Do managers have a variety of illegal business problems?
Vanke: A lawsuit is being filed
Previously, it was reported that Yu Liang, the manager of Vanke, manipulated Vanke for personal gain. Vanke's management said that the company reported in real name this time is mainly a subsidiary of Yantai Riying Group, and the actual controller of the company is Li Jun. Yantai Vanke has cooperated with its partner Li Jun (hereinafter referred to as Yantai Partner) to develop real estate projects for nearly 10 years and cooperated in 7 projects.
Vanke said that there was another hidden reason in the report. Vanke said that starting from 2021, due to the overall market environment, the sales of many projects in Yantai fell short of expectations, and the profits could not reach the initial feasibility study indicators. In order to ensure the delivery and normal operation of the project, the funds of the project company cannot be allocated according to the wishes of the Yantai partners. At the same time, the Yantai partner, as a shareholder, ignored the needs of the project company's construction, delivery and normal operation, and put forward a huge demand of 1.6 billion yuan without reasonable basis. Although Yantai Vanke and Yantai partners have communicated many times, they have never been able to reach an agreement. The Yantai partner subsequently reported to the government, public security, taxation bureau, China Securities Regulatory Commission, Shenzhen Stock Exchange and other institutions, and was exposed in the media many times.
Vanke further stated that in 2023, the Yantai Public Security Bureau received and accepted the report, and after three months of investigation and evidence collection, the Yantai Public Security Bureau issued a notice of "not filing the case" in November 2023. The company does not convey benefits to executives through the co-investment system. Secondly, employees participate in co-investment, and the co-investment plan clearly requires them to take out their own funds and invest together with the company, and the rights and interests of employees are all small shareholders, equal rights and responsibilities with other shareholders, and there is no particularity. Whether it is a wholly-owned project or a cooperative project of Vanke, the co-investment model, terms and requirements are also the same. Finally, the co-investment system embodies the principle of revenue sharing and risk sharing.
"In response to the economic dispute with the partner, Yantai Vanke has filed a civil lawsuit in the Yantai court in February 2024 to assert its legal rights in accordance with the law. The case has entered the formal trial stage, and the court has ruled to take litigation preservation of the partner's assets in accordance with the law. Vanke said.
encountered phased business difficulties
Vanke: Seeking wealth in danger
Vanke said that it has indeed encountered phased operating difficulties and short-term pressure on liquidity, but Vanke has formulated a package of plans to stabilize operations and reduce liabilities, which can properly resolve these phased pressures.
"We will first self-help, self-resolve risks based on our own capabilities and resources, reopen and review all the businesses in hand, sort them out, and formulate targeted plans. Secondly, we have made full use of the various existing financing tools, and we have actively mobilized all front-line forces to make good use of a series of policy-based financing tools issued by the central government that are conducive to the industry's risk resolution. Vanke said.
Previously, at the 2023 annual results meeting at the end of March, Yu Liang said that Vanke's management team resolutely did not "lie flat" and would definitely cross this stage threshold. The company will intensify efforts to revitalize the stock and change the property of real estate, and reduce interest-paying debts by more than 100 billion yuan in the next two years to ensure the safety of the company.
In addition, in the 2023 annual report, Vanke's management made a detailed analysis of the relevant reasons for the current challenges faced by Vanke. They believe that although there are reasons for changes in the external market, it is more that the enterprises themselves still maintain the inertia of expansion and fail to adjust in time when the macro situation and industry conditions have undergone major changes.
According to the annual report, Vanke's challenges mainly include three aspects:
First, although Vanke was the first in the industry to realize the need for transformation and development, put forward the business philosophy of "attaching equal importance to development, operation and services", and actually laid out a number of business service businesses and formats based on its own main business and in line with national policy guidance, there were problems of too big steps and too hasty in the actual operation process. The transformation business exceeded Vanke's ability to match resources, occupied too much development business funds, and the scale was too large, resulting in the management ability not keeping up, and the business objectives could not be achieved as planned.
Second, although the company realized earlier in the industry that the rapid growth would eventually end, the follow-up behavior failed to get rid of the inertia of the industry, and in many cities, including some key cities and first-tier cities, there were investment ventures and mistakes. After the central government clearly put forward the high-quality development goals and requirements of the industry, it failed to make a more thorough adjustment to the "three highs" model that prevailed in the industry, resulting in a passive situation today.
Third, after the central government made a clear strategic judgment on the fundamental changes in the relationship between supply and demand in the industry, and introduced a series of important policies and measures for the transformation of the new development model of the industry, Vanke's understanding of the trend changes in the financing model was not comprehensive and thorough, and the Group has started the adjustment of the real estate financing model, but it still needs a process to shift from the total credit financing to the new financing model.
Executives go abroad and don't return, and some have moral hazard?
Vanke: That's not the case
Regarding the rumors that many of Vanke's senior executives have not returned abroad and that the management has been under border control, Vanke explained that the actual situation is: Cai Ping, the former chief partner of Central China, whose child was born in the United States, is now in the stage of receiving education and needs family companionship, and he will resign in 2023 and obtain the company's consent. Wang Runchuan, the former lead partner of the Headquarters Coordination Center, resigned due to going to Hong Kong for further study, and currently lives in Shenzhen. The Group's management is traveling abroad on official business as normal.
Zhu Jiusheng, President and CEO of Vanke Group, returned from a project inspection in Hong Kong on April 14, and on the same day, Zhu Bao, Co-President of Vanke Group, flew to Japan for a business inspection at noon.
In the recent negative public opinion, there are also some doubts about the moral hazard of management.
In this regard, Vanke said that there is no situation where the management seeks personal gain. "Today, it seems that some of the past models and practices may no longer be suitable for the new stage of development of the industry, and we will comprehensively review and sort out the corresponding strategies. If we find a problem of violation, we will actively rectify it, and if we find a problem of violation, the Group will not tolerate it. We have also made a detailed report with the Shenzhen SASAC and major shareholders on the above relevant situation. The support of Shenzhen SASAC and Shenzhen Metro to Vanke is as always, and the company is fortunate to receive the full support and trust of Shenzhen State-owned Assets and major shareholders during the market adjustment period. ”
On April 10, Xiao Jin, general manager of Vanke Jinan, was taken away by Shandong police for investigation, and some market voices speculated that it was related to the Yantai report.
Vanke said that the group had arranged for the Beijing area and Jinan company to communicate with the Jinan Political and Legal Committee and the police investigating the case. The police said that Xiao Jin's case was his personal case and had nothing to do with the Yantai report.
Zhang Dawei, chief analyst of Centaline Real Estate, believes that Vanke's problem is very simple, and the personal problems of its reported leaders will not affect the overall situation, but only affect the good image that has been established.