Author: Weilan
来 源:正和岛(ID:zhenghedao)
The storm died down for a moment.
On April 14, Yu Liang, Chairman of the Board of Directors of Vanke, and Zhu Jiusheng, President of Vanke, appeared to respond to a number of negative news such as the recent Yantai report, Xiao Jin, the head of Vanke Jinan Company, being taken away by the public security organs, and the rumors that the group's senior executives were under border control, which brought the public opinion turmoil to an end temporarily.
Although the sea has calmed down, the tumbling swells of the ocean floor are still accumulating.
Rating downgrades, double kills of stocks and bonds, rumors of rollovers, blocked financing, and debt capping......
As an "excellent student" who has always been regarded as a real estate company, the scripts that have been staged in other real estate companies in the past have reappeared in Vanke, which can't help but make the market sigh and sigh.
And this can't help but make people think, why did Vanke, a "good student" who has always answered the questionnaire well, suddenly have so many negative public opinions and crises?
Will Vanke survive this catastrophe, and where will Vanke go from here, and how should the story of China's real estate industry be continued?
This is a question that we need to think about and face head-on.
1. Vanke was reported, there was an "omen"?
In fact, the Yantai whistleblower incident dates back to August 2023.
At that time, it was reported by the media that 11 enterprises in Yantai joined together and submitted a report letter to the relevant departments, revealing that Vanke had embezzled the funds of the project company without the consent of all shareholders in the process of cooperating with them on the project.
The recent full-scale outbreak of the Yantai whistleblower incident was that after the two parties failed to reach an agreement, the Yantai project partner released a whistleblower letter on the public platform, raising a series of accusations against Vanke and its affiliates.
In the letter, the Yantai partner mentioned Vanke's suspected establishment of a "shadow" bank to issue usury, deceive shareholders and misappropriate project construction funds, and a group of executives led by Yu Liang used Vanke to misappropriate funds, issue usury, evade taxes, and launder money.
Afterwards, on April 14, Vanke's management also responded:
The company reported in real name this time is mainly a subsidiary of Yantai Riying Group whose actual controller is Li Jun. Yantai Vanke has cooperated with its partner Li Jun to develop real estate projects for nearly 10 years and cooperated in 7 projects.
Since 2021, due to the overall market environment, the sales of many projects in Yantai have fallen short of expectations, and the profits have not reached 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.
At the same time, Vanke also said that the Yantai whistleblower reported to the Yantai public security organ in 2023 on the issue of Vanke's misappropriation of funds, and it was accepted. After three months of investigation and evidence collection, the Yantai public security organs made a decision in November 2023 not to file the case. The tax authorities and Yantai Vanke exchanged preliminary inspection opinions, and at present, the tax authorities have not determined that Yantai Vanke has the subjective intention to evade taxes.
So far, no relevant official body has reached a conclusion on this matter.
In fact, compared with the Yantai report, it is worth mentioning that as early as 2020, Vanke turned against the shareholders of a project in Tangshan and was angrily reported by minority shareholders.
In 2021, some self-media told the ins and outs of the matter, which is outlined here:
In 2018, Tangshan Vanke won an urban village renovation project and brought in a local real estate company as a partner to share the benefits and costs.
This is Vanke's consistent cooperative development model, but it should be noted that this project needs more than 12 billion yuan in the early stage, and Tangshan Vanke has agreed with the minority shareholders that I will pay 100 million, and the remaining 1.1 billion will be in your name. But I don't need you to actually pay for it, I will arrange a third-party company to lend you a loan with an interest rate of 11.27%, but there is one condition, your license, official seal, online banking, etc. need to be staked by me.
The minority shareholders agreed. According to insiders of minority shareholders, after signing the "Loan Contract", two funds totaling 1.1 billion yuan were transferred to the minority shareholders' accounts, and then immediately transferred to the project company.
The term of the contract was one year and had the nature of a bridge, but after the expiration of the contract, the principal was not repaid, the contract was not terminated, and the minority shareholder account continued to pay interest to the company. When the minority shareholders reacted and tried to terminate the loan relationship and asked for their official seal and online banking, they were rejected by Vanke. The two sides eventually turned against each other and went to court.
It is precisely this kind of similar operation that Vanke was reported to have set up a shadow bank. But in fact, there is a lot of scope for discussion on this matter.
On the one hand, most of China's real estate companies have followed the model of "high turnover, high debt, and high profit" since their inception, and many enterprises have not yet broken free from this model;
On the other hand, since 2016, when the state proposed "housing for living, not speculation", regulation and control have continued to increase, forming a control pattern of three red lines, restrictions on the concentration of bank loans, and centralized land supply, including restrictions on the circulation of real estate transactions.
Under the conflict between these two, the emergence of so-called "shadow banking" seems to have become an inevitability.
What is "shadow banking"? "Inside the Matter" has a relatively clear explanation of "shadow banking":
The so-called "shadow banking" is similar to the credit business of a bank, but it is not on the bank's balance sheet and is not subject to the rules of banking supervision.
Banks are the core of the financial system, with large scale, high leverage, and the savings of thousands of households, so they are strictly regulated. What if a real estate company is willing to borrow money with 10% interest and the bank wants to borrow, but the mainland strictly restricts the amount of loans that banks can give to real estate companies?
The bank can sell a wealth management product to the people with an interest rate of 5%, and then entrust the raised money to the trust company, so that the trust company can lend the money to the real estate company. In this "bank-trust cooperation" business, the wealth management products issued are not counted as bank savings, and the investment entrusted to the trust company is not counted as bank loans, so this "off-balance sheet business" bypasses the supervision of banks and is a kind of "shadow banking" business.
There are many companies that need to borrow money, and there are many people who are willing to buy bank wealth management products, so 'shadow banking' is booming.
In the past, real estate was in an upward market, where risks were hidden in the high returns of the incremental market, and all parties took what they wanted. However, in the past two years, when the real estate industry is in a downward cycle, the risks behind Vanke's model have begun to be revealed.
An industry insider also commented on the Tangshan Vanke incident: "In the north, such cases abound. The first-level resources are in the hands of local minority shareholders, but they have no money, the listed company cannot over-invest, and the first-level project is too risky, giving third-party financing guarantees, partners taking debts, and developers operating the market.
When the market is up, the minority shareholders are white wolves with small and empty gloves, but when the market is down, the excess income from dry shares is not enough to cover the interest, and the minority shareholders are unable to bear it, so they seize the third-party background and jump out after the negotiation fails.
The problem is this, if the third-party shell company is not controlled by Vanke, how can the investor dare to allocate capital?"
In fact, there is no black-and-white "market" dividing line in the real world, and there are only various combinations of interlocking interests.
As the book "Inside the Situation" analyzes from a more macro perspective:
"Housing prices are linked to land prices, land prices are linked to finance, and finance is linked to infrastructure, so economic growth, local finance, banks, and real estate have formed a relationship of 'prosperity and loss'.
This land-centric urbanization ignores the real heart of urbanization: people. ”
The development of the virtual economy is out of the orbit of serving the real economy, and its development will inevitably encounter setbacks and may bring about serious crises.
Similarly, if the development of real estate is detached from serving the needs of the real economy and serving the needs of the people, and becomes an increasingly pure financial number game, then it will also be as Shakespeare wrote:
This cruel pleasure will end in brutality.
2. If Wang Shi is still here, will Vanke be better?
As of the close of trading on April 19, the latest market value of Vanke A was about 79.94 billion yuan, which is equivalent to returning to 2015 overnight.
Today's Vanke can't help but make people nostalgic for the days when Wang Shi was still there.
And after this series of public opinion, some people asked on the Internet:
If Wang Shi hadn't left Vanke, would Vanke have gone more steadily?
In fact, before answering this question, we must first answer, what did Wang Shi leave to Vanke?
Back in the summer of 2017, the battle for Baowan finally came to an end, and at the same time, Wang Shi, the soul of Vanke, who single-handedly founded Vanke, also turned around and left, handing over the baton to the team with Yu Liang as the core.
From 1984 to 2017, for more than 30 years, Wang Shi first led Vanke from a chaotic and disorderly diversified enterprise lacking long-term strategic planning to a real estate direction, cutting other profitable businesses, and constantly focusing and slimming down at the strategic level.
At the time when real estate development was the most profitable, Wang Shi proposed that the profit of more than 25% would not be earned, and Vanke wanted long-term development.
Under the positioning and determination of this professional strategy, coupled with the unprecedented prosperity of the entire real estate industry, Wang Shi created a "golden age" for Vanke.
But these are not the places where Wang Shi distinguishes Vanke from other real estate companies the most.
In 1988, Wang Shi carried out the shareholding reform, gave up 40% of the shares he could have obtained, introduced the professional manager system, and realized Vanke's innovation in the modern enterprise system, which was the most valuable wealth left by Wang Shi to Vanke.
Some people commented that from the moment Wang Shi gave up control of the enterprise, he chose to believe in the value of professional managers in management and operation, and completed the rite of passage of Chinese enterprises - the real separation of business management rights and ownership.
Through the iteration of the professional manager system and the standardization of management, Vanke quickly realized the transformation from a grass platform team to a "regular army" under the background of the barbaric growth of real estate at that time. The professional experience quality model released by Vanke once became a vane for industry imitation.
Wang Shi has said on different occasions:
"Vanke is not my son, what I am trying to do is to build an advanced modern enterprise system for Vanke, the system and team are the most valuable place for Vanke, without me, it can still develop healthily, this is my success." ”
In fact, as Wang Shi said, even now, with the advent of the "black iron era" of real estate, Vanke is still named an "honor student" by the outside world.
These are the positive aspects of the modern system, but everything has two sides, and Wang Shi is destined to take new risks while leading Vanke to become a benchmark enterprise in real estate.
Whether it is the Junwan dispute in 1994 or the Baowan dispute that began in 2015, it is the result of this risk.
Although Wang Shi and Vanke's management have successively repelled the "barbarians at the door", the Baowan dispute is the longest-lasting, largest-scale, and widest-ranging capital game war in the history of Chinese business.
However, this does not mean that Vanke has peace of mind in the dimension of corporate governance.
"Barbarians at the Gate" is the story of how Wall Street private equity giant KKR leveraged its buyout of RJR Nabiske.
On the other hand, Wall Street also has a concept of "smart people in the house", the most representative of which is Enron, for which there is also a documentary called "Smart People in the House" that tells the story of how Enron insiders brought down the company and swept away the funds without constraints.
Wang Shi created a professional manager system for Vanke, but the occurrence of the dispute between Junwan and Baowan reflects the problems in Vanke's shareholder structure.
With the end of the Baowan controversy, after a series of major shareholders such as China Resources, Baoneng and Evergrande withdrew, in the case of only Shenzhen Railway, a state-owned enterprise, as a major shareholder, in fact, it is debatable whether an effective check and balance game can be formed between the shareholder (board of directors) level and the management level.
Behind the imbalance in the game, there may be two situations: the first is that Shenzhen Railway, the largest shareholder, strongly dominates Vanke's development strategy, and the second is that Vanke's management in turn controls the board of directors, and it is difficult for shareholders to effectively supervise and restrain the management committee.
Wang Shi once said bluntly: "Vanke Culture has played a mainstay role in the equity battle. As the founder of Vanke, I adhere to Vanke's culture, including transparency, institutional norms, and social responsibility. ”
But it is also debatable whether the culture that Wang Shi has built for Vanke is sustainable.
Zhou Hua, a writer who has written a biography of Wang Shi, once raised such a question when Wang Shi was criticized for his resignation in the Baowan dispute:
Of course, Wang Shi has a lot to do without Vanke, but what about Vanke, a company that has always insisted on beauty, lost Wang Shi and cut off its cultural genes, is it still Vanke in our minds?
At present, "is today's Vanke still the Vanke that people once thought of?" is still a question worth asking.
So, the previous unanswered question is here, if Wang Shi is still here, will Vanke be better?
3. Vanke's problem is not only Vanke's problem
In fact, it must be admitted that capital is profit-seeking, and this profit-seeking nature will inevitably lead to short-sightedness, but a good and great entrepreneur can overcome this short-sightedness and not be devoured by capital, so as to achieve true long-termism.
Wang Shi is not the greatest group of entrepreneurs in the history of human business, but he can also be called one of the best entrepreneurs in China.
As a three-in-one identity of Vanke's founder, professional manager and minority shareholder, Wang Shi plays an irreplaceable role in Vanke's development.
In addition, Wang Shi has a high degree of restraint in dealing with wealth itself, which is also illustrated by the fact that as a person who has the opportunity to become the richest man in China, he has never appeared on the rich list such as Forbes and Hurun.
To a certain extent, these two can show that if Wang Shi is still at the helm of Vanke, at least it will be able to make Vanke, a big ship, more transparent and standardized from the perspective of the company's internal management in the process of sailing into the stormy seas.
However, the "three highs" problem faced by Vanke or most real estate companies already had signs when Wang Shi was still there.
In 2014, Vanke's interest-bearing liabilities were only 69 billion yuan, which increased by 10.5 billion yuan in 2015 to 79.5 billion yuan, increased by 49.4 billion yuan to 128.9 billion yuan in 2016, an increase of 62%, and continued to increase by 48% to 190.6 billion yuan in 2017, an increase of 176% in three years.
If Wang Shi is still there, it is difficult to say whether Vanke's "three highs" model can be avoided, but one thing is for sure, Vanke's situation should not be worse than it is now.
Moreover, it is worth thinking about the fact that the real estate industry has developed to this situation, and the problems faced by Vanke are not only Vanke's problems, but also the problems that all real estate enterprises, the upstream and downstream supply chains of real estate, and even the government, financial institutions and each of us must face.
This is the great test of the times.
In "Inside the Matter", the author Lan Xiaohuan analyzed:
"The magic of land capitalization lies in the fact that it can break free from physical attributes, trade promises and hopes in an abstract sense, and aggregate and seal past savings, present income, and future prospects in a small piece of land, so that its value can skyrocket.
The resulting energy is no less than scientific and technological progress, supporting huge investments in industrialization and urbanization. One of the mysteries of economic development is the transformation of tangible assets into this abstract capital, thus aggregating resources across space and time. ”
But just as all the dividends of the scientific and technological revolution will eventually disappear, so will the dividends of land finance, which cannot last forever.
For Vanke and all real estate companies, continuous policy support and a more ambitious economic recovery may be the prerequisite for the company to turn the corner.
However, from the perspective of the enterprise, it is not possible to lie flat directly, purely counting on relief, the more difficult it is, the more it is necessary to seek inward, find the root cause of the problem, and pin the hope of its own safety on the outside world is always the last policy.
For the relevant regulatory departments and government departments, how to clarify the context of the entire real estate, peel off the cocoon in the thousands of miles of volts, find the grass snake gray line, and achieve "mine demolition" and soft landing, there are many places that need to be summarized and reflected.
Finally, it is still necessary to wish Vanke and all real estate companies to successfully survive the difficulties and successfully solve a series of problems such as guaranteed delivery, deleveraging, and debt, which is not only related to the life and death of enterprises, but also involves the vital interests of each of us.
More than 1,000 years ago, Du Fu shouted out the classic quatrain that has been passed down through the ages: There are tens of thousands of mansions, and the poor people in the world are happy.
Today, this ideal has partially become a reality, and most people can basically have a place to live, whether they buy or rent. But there are also many new problems that we are facing, and how to live better and happier is the challenge of our generation.
We can't run away from it, we can only face it, we have to face it.
References: [1]."Inside the Matter", Lan Xiaohuan, Shanghai People's Publishing House[2]."Vanke, "Honor Student" also failed the test?", China News Weekly
[3]. "Real Estate, Great Changes", Zhenghe Island
[4]. "Behind the Scenes of Vanke's Heavy Punishment of Liu Xiao: A Reported Gray Business", where to dismantle
[5]. "Revealing Vanke's Shadow Bank", where to dismantle
[6]. "Wang Shi's curtain call, what did he leave to Vanke?", Zhenghe Island
[7]. "Wang Shi's Biography Author's 10,000-Character Long Article: The Wang Shi I Know, the Exorcism Incident in My Eyes", Zhenghe Island
Typography | Edited by Shen Wangwang | Yoon Yoon Editor-in-Chief | Sun Yunguang
