By Clare Jim and Yukun Zhang
HONG KONG (Reuters) -China Vanke CEO Zhu Jiusheng was detained by public security authorities on Wednesday and a Shenzhen government task force has stepped in to oversee the property developer’s operation, state media The Economic Observer reported on Thursday.
The report, citing sources, said state-backed Vanke may face a takeover by the government and a reorganization.
Vanke did not immediately respond to a request for comment. A call to the Shenzhen government outside office hours went unanswered.
If true, the move against one of the best-known household names in China could further rattle the struggling China property sector and undermine already weak homebuyer and investor confidence.
China’s property sector, which accounted for around a quarter of the economy at its peak, has been mired in an unprecedented debt crisis since 2021, resulting in corporate defaults and uncompleted homes across the country.
Chinese authorities have been scrambling to bolster the sector with a range of measures over the years, including cutting mortgage rates and minimum down-payment ratios as well as encouraging bank lending to developers.
Vanke’s financial woes became public early last year after the firm sought to extend the maturity of its debt as its monthly sales plunged below break-even levels. It was ranked No. 5 by sales value in the country last year, down from No.2 in 2023.
Onshore bond prices of the troubled property developer have been volatile in the past week over increasing concerns about its ability to meet upcoming debt payments.
Five of its onshore bonds were temporarily suspended from trading on Thursday after plunging as much as 29%.
Vanke in a statement earlier on Thursday said that it will “go all out” to raise funds through borrowings and asset disposals to pay its public bond obligations due in 2025.
The developer has a total of $3.4 billion worth of public bonds – which are onshore except for one dollar bond – maturing this year. Its next onshore repayment deadline is Jan. 27.
As of 1503 GMT, Vanke’s May 2025 dollar notes were bid at 58.291 cents on the dollar, down from 63 cents earlier in the session.
(Editing by Jason Neely and Christina Fincher)
