China Working to Stabilise Vanke as Developer's Woes Deepen

Chinese officials are taking steps to stabilise operations at China Vanke after deepening liquidity stress and questions surrounding the whereabouts of its top executive triggered turmoil for its bonds and shares last week, according to people familiar with the matter.

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BEIJING -

Officials at Shenzhen, the southern metropolis where Vanke is based, held a closed-door meeting to discuss Vanke on Jan 17, said the sources. Vanke's largest shareholder is a state firm controlled by the city, giving the local government tremendous sway over the developer.

The Shenzhen government said during the meeting it plans to ensure that Vanke's operations remain stable, the people added. The officials also plan to bring in new auditors and financial advisers to assess Vanke's balance sheet and property projects to pave the way for next steps, according to the people.

The discussions are preliminary and could be subject to change, the sources said.

Financial regulators and the local government of Shenzhen had already played a role in coordinating financing extension for Vanke in the past. A household name in China, Vanke had long been seen as insulated from a protracted property crisis because of its government link.