AFP, Beijing Vanke, a heavily indebted Chinese real estate company, announced on Monday that its CEO was leaving for “health reasons” and that the company had suffered a significant loss the previous year owing to a persistent market downturn.
In recent years, Beijing has struggled with a protracted crisis in the nation’s enormous real estate market, which was once a vital economic pillar but is currently plagued by massive debt.
Listed in Hong Kong According to research firm CRIC, Vanke, which is partially owned by the Shenzhen government, was the fourth-largest real estate company in China by sales last year.
This month, the Chinese publication the Economic Reporter quoted sources stating that Zhu Jiusheng, the CEO, had been “taken away by public security authorities.” However, the report did not clarify if he had been placed under formal detention.
Vanke stated in a statement on Monday that Zhu “has applied to resign… owing to health reasons,” but he has not confirmed that he has been detained.
According to the corporation, Zhu “will no longer hold any position within the company.”
What offenses Zhu might be accused of committing were not specified in the article published by the Economic Observer.
At the time, it stated that Zhu and those close to him had not received any response to calls or messages.
An AFP request for comment after the report was published was not answered by Vanke.
The corporation stated that Zhu Xu, the company secretary, and Yu Liang, the chairman of the board, had resigned from their positions “due to work adjustments,” but they would remain in other capacities.
- Ongoing problems –
In a filing at the Hong Kong Stock Exchange on Monday, Vanke, like other Chinese real estate giants, warned of a net loss of about 45 billion yuan ($6.2 billion) last year after stumbling through a years-long debt crisis.
Vanke stated in the filing that “sales and gross profit margins turned out to be lower than investment expectations” and that “the continuous market downturn” were among the causes of the anticipated losses.
The statement read, “The Company sincerely apologizes for the performance loss and will do everything in its power to foster business improvement.”
“Looking ahead, the company believes that the real estate market will stabilize and stop declining because the industry has already overcome the most challenging period.”
Several significant Chinese real estate companies, including Vanke, have been involved in a debt problem in recent years, which has put developers in dire straits.
Moody’s, a rating agency, lowered Vanke’s credit rating earlier this month to reflect a “negative” outlook.
The company’s problems are representative of the recent recession, which has put downward pressure on Beijing’s yearly growth targets by unsettling investors and lowering consumer confidence.
Earlier this month, authorities reported one of China’s lowest rates of economic growth in decades, indicating that a series of recent reforms intended to boost activity have not yet fully taken effect.
Lowering the deed tax rates for specific first and second homes in four major cities was one of the measures Beijing announced in November to boost the struggling real estate industry.