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China's Xian housing authority halts sales of developer Vanke
April 26, 2017 / 7:02 AM / 7 months ago

China's Xian housing authority halts sales of developer Vanke

HONG KONG (Reuters) - The housing authority of China’s Xian city on Wednesday said it has suspended sales of projects by China Vanke Co Ltd, the country’s second-biggest homebuilder by sales, citing property transactions that it suspects are “against regulation”.

The Xian House Management Bureau, in the statement on its website dated April 24, said it suspects China Vanke of violating sales regulations at two property projects in the city in Shaanxi province. It said it has halted all sales of Vanke and those of its subsidiaries in the city with immediate effect.

The bureau listed 12 projects where it had halted sales and said it had also suspended approvals of pre-sales at other projects.

In a separate statement also dated April 24, the bureau said it had suspended sales of four projects by four other local developers who it also suspected had violated sales regulations.

Vanke’s Hong Kong-listed shares fell more than 3 percent on Wednesday afternoon, while its Shenzhen-listed stock was down 0.7 percent.

China Vanke, with a market value of around $33 billion, did not immediately respond to a request for comment.

The developer has been in crisis since late 2015 when financial conglomerate Baoneng Group built up a 25 percent stake and sought to oust management.

In March, Vanke came under direct control of the Shenzhen government, a move that could end a struggle for boardroom control but which raised questions as to what extent the property giant would remain a market-driven firm.

China’s real estate sector contributes around 15 percent to economic growth, and both central and local governments have been keen to take a more active role in the market, particularly when sky-rocketing prices have become a serious concern for policymakers.

Reporting by Donny Kwok; Editing by Anne Marie Roantree and Christopher Cushing

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