The Shenzhen Stock Exchange criticized both China Vanke Co and Baoneng Group's Shenzhen Jushenghua Co on Thursday for their actions related to the acquisition of Vanke shares by the unit of Baoneng.
The exchange's move came after Vanke filed letters with it and with the China Securities Regulatory Commission (CSRC) on -Tuesday, calling for both to investigate -Jushenghua Co for alleged illegal acts and insufficient disclosure.
The CSRC held several emergency conferences on Wednesday to discuss China Vanke Co's letter and set up a special team to deal with the battle for control of Vanke, domestic news portal caixin.com reported on Thursday.
Jushenghua, a unit of Baoneng Group and a shareholder of Vanke, set up nine asset-management plans (AMPs) to raise funds to boost its stake in Vanke, domestic financial news portal stcn.com reported on Wednesday, citing -Vanke's letter.
Baoneng currently is the largest shareholder of Vanke.
The report said it's illegal for Jushenghua to fund such transactions via those vehicles, and the disclosure that it did so also violates regulations.
Further, Jushenghua harmed minority shareholders' interests by trading on the capital market with funds raised through AMPs, said the stcn.com report.
Baoneng's overall stake in -Vanke was 25.4 percent as of July 18, according to the letter.
In responding to Vanke's letter, the Shenzhen Stock Exchange criticized Vanke for disclosing crucial information to non-designated media outlets, which it said violated disclosure rules.
The exchange's response was posted on its website on Thursday.
Also, it blamed Jushenghua for not submitting a report of its equity change in Vanke, said a separate announcement on its website.
The nine AMPs are "highly leveraged" and six have shown signs of potential losses, said a 21jingji.com report on Thursday. It said that one of the nine "is approaching liquidation."
The site also quoted one of the nine AMP managers as saying that the AMP of his company is operating smoothly and nobody has exerted any pressure on their products.
The Shenzhen-listed shares of Vanke dropped 0.35 percent on Thursday to 17.02 yuan ($2.55).
