HONG KONG: The Hong Kong-listed shares of property developer China Vanke plunged more than 8% on Friday after state media reported that authorities had detained its chief executive.
A Shenzhen government task force has stepped in to oversee operations at the state-backed developer, the Economic Observer reported on Thursday citing sources. It may face government takeover and reorganisation, the outlet said.
Vanke declined to comment when contacted by Reuters. A call to the Shenzhen government outside office hours went unanswered.
Financial woes of Vanke, a bellwether of China's property market, became public early last year after the developer sought to extend the maturity of debt as monthly sales plunged below break-even levels. It was ranked fifth by sales value last year versus second in 2023.
The reported detention of Zhu Jiusheng is likely to further dent confidence in the beleaguered property sector among homebuyers as well as investors.
The sector, which accounted for around a quarter of the economy at its peak, has been mired in a debt crisis since 2021, resulting in corporate defaults and uncompleted homes.
Vanke is facing a deepening bond selloff as worries grow about its mountain of debt coming due and a crisis that government rescue efforts have so far struggled to remedy.
The developer's May 2025 U.S. dollar notes were bid at 56.491 cents on the dollar in morning trade versus 63 cents a day earlier.
Its Shenzhen-listed shares were down 4%. - Reuters
