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[BEIJING] China's securities regulator said on Friday that it was studying Baoneng Group's acquisition of a major stake in developer China Vanke Co with other financial watchdogs to see if any rules were violated.
It is the first time the stock regulator has said it is looking into the deal, which has triggered a high-profile battle between Vanke Chairman Wang Shi and Baoneng.
Vanke issued a statement on the Shenzhen stock exchange late on Friday to say that it hoped the management would not change the company's operating style. "The management hopes the company's culture, branding and credibility will be kept intact. These are the company's most precious assets," Vanke said.
Baoneng, a property and insurance conglomerate, became Vanke's biggest shareholder earlier this month after buying a stake of more than 20 per cent in China's biggest home builder via unit Shenzhen Jushenghua Co and affiliate Foresea Life Insurance.
As of Dec 18, Jushenghua had increased its holdings in Vanke to 24.26 per cent, according to a filing on the Hong Kong stock exchange this week.
Wang has attacked Baoneng, saying it lacked credibility and would damage Vanke. Baoneng said it had a "good reputation" and strictly abided by the law.
The China Securities Regulatory Commission did not specify its reasons for examining the deal. Spokesman Zhang Xiaojun told a news conference on Friday that the regulator was studying the case with banking and insurance regulators and reiterated that it would not interfere if no rules were broken.
Shares of Vanke have been suspended since last week pending an announcement of a major restructuring.
Zhang added that all parties involved in the acquisition of stakes in listed companies should make adequate disclosures, and that decisions made by the board of a company following such acquisitions "should be in the interest of the company and its shareholders". He did not elaborate.