Watson, independent director of Vanke, responded that ＂independent directors are not independent＂
Yesterday, Watson, an independent director of Vanke, continued to explain and respond to his voting position in Vanke’s restructuring plan. In response to the allegations in Baoneng’s statement that "independent directors have lost their independence and failed to perform their duties in good faith" and some netizens said that "this independent director can’t do it", Watson said in the article that the independent directors’ affirmative votes only won the right to speak and vote for the general public shareholders, preventing individual major shareholders from taking advantage of the board of directors to kidnap the company’s decision, and they are willing to praise everyone, including Mr. Zhang Liping.
Yesterday, Watson continued to publish a document to disclose the relevant details of the voting of the board of directors of Vanke’s restructuring plan. However, he said that people can hate and criticize Wang Shi’s numerous personal mistakes and mistakes, but it is not in the interests of Vanke’s shareholders to fundamentally subvert Vanke’s governance structure and change its management team, and it is morally difficult to get recognition from all walks of life.
China Resources wants to drive away the management and absolutely control Vanke?
Yesterday, Watson continued to publish a document to disclose the relevant details of the voting of the board of directors of Vanke’s restructuring plan. Watson mentioned that according to the answers given by the representative of China Resources’ directors to his questions at the board meeting, what China Resources is seeking this time is not only the status of the largest shareholder, but also the ability to hold and control Vanke, so that Vanke can truly become a state-owned holding enterprise under China Resources, obey the centralized leadership of China Resources, and fundamentally end the situation that China Resources was the largest shareholder and kept its word. Since it is objectively impossible for China Resources to increase its shareholding in Vanke to more than 50% in the short term and become an absolute controlling shareholder, it is necessary to change the current governance structure of Vanke and drive away the management of the company that has been actually controlled for a long time.
Watson mentioned in the article: "I heard that someone has spoken out. After China Resources leads, according to the management of central enterprises, Wang Shi must leave. Yu Liang and others can stay, but they can’t stand the new management methods of state-owned enterprises, or they can choose to leave."
In this regard, Watson also expressed his attitude in the article. He believes that Vanke’s governance structure and management team for many years are the core competitiveness of Vanke as a benchmark enterprise in the industry. People can hate and criticize Wang Shi’s numerous personal mistakes and mistakes, but fundamentally subverting Vanke’s governance structure and changing the management team is not in the interests of Vanke’s shareholders in his view, and it is difficult to get moral recognition from all walks of life.
Vote in favor to prevent the kidnapping of the company at the board meeting of major shareholders
Watson mentioned that the veto reorganization plan proposed by China Resources allowed the stock to resume trading without any feasible alternatives or other attractive prospects. In addition, the acquisition theme of Baoneng was gone, and Vanke’s share price was bound to continue to fall.
Regarding the position of voting on Vanke’s board of directors, Watson said that China Resources wanted to be the largest shareholder, and instead of increasing its holdings in the secondary market, it proposed a plan of "issuing additional shares to China Resources after the matter was settled". This inevitably sounds like saying "wait until the stock price falls to the right place before issuing additional shares to China Resources". He said, as an independent director whose duty is to protect the interests of all shareholders, how can I agree with such a plan? I guess this may be the reason why Zhang Liping, the independent director recommended by China Resources, has no choice but to avoid voting under the pressure of internal and external pressure and conscience.
Watson said that they voted for the adoption of the plan. In fact, they did not really make any decisions on behalf of the majority of shareholders, but let them decide for themselves when they submitted it to the shareholders’ meeting later. Voting in favor only won the right to speak and vote for the majority of public shareholders, and prevented individual major shareholders from taking advantage of the board of directors to kidnap the company’s decision, which is the real function and responsibility of independent directors.
Watson praised every Vanke independent director.
Watson said that of Vanke’s four independent directors, three voted in favor, and one actually supported the opinions of most independent directors under the great pressure that outsiders could not understand, which was equivalent to voting in favor and fighting for the opportunities and rights of public shareholders to make their own decisions. It is the voting and voice of independent directors that have forced China Resources and perhaps Baoneng to constantly disclose their true intentions, thus avoiding the blind response and being pushed around by investors without knowing when the restructuring plan is rejected and the stock resumes trading.
Watson said that he was sincerely willing to praise each and every one of them, including Mr. Zhang Liping, for someone jokingly mentioned that "this independent director can’t do it". Because he expressed his true will not to deny the reorganization plan under the threat of huge interests in a completely legal and compliant way and would rather suffer personally. This is another form of courage and unyielding. If all the independent directors of listed companies in China perform their duties like this, there will be real hope in the China stock market. In the article, Watson also responded to Baoneng’s query about independent directors. At the end of the article, Watson wrote: I heard that Baoneng, who has not yet proposed a candidate for the board of directors, decided to make a public decision based on his own interests, and severely accused the independent directors who won the right to speak and vote on the restructuring plan for them, saying that "independent directors lost their independence and failed to perform their duties in good faith". We have no regrets about this.
Finally, Watson also expressed his feelings: I had no idea at that time that there were a lot of hidden secrets behind this vote that I didn’t know, and even I was quickly dragged into the whirlpool, and this subsequent plot was ups and downs, which further revealed more and deeper institutional torture.
Text/reporter Zhu Kaiyun
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Vanke’s reorganization plan B surfaced?
The night before yesterday, Vanke issued an announcement on the progress of suspension of major asset restructuring. Vanke said that there are uncertainties in whether the transaction with Shenzhen Metro can be approved by the relevant state-owned assets supervision and administration institutions, reviewed and approved by the company’s shareholders’ meeting and category shareholders’ meeting, and approved by the China Securities Regulatory Commission, as well as the final approval or approval time. At the same time, Vanke announced that in addition to the Metro Group, the company signed a non-legally binding letter of intent for cooperation with another potential counterparty on December 25, 2015. This is the first time that Vanke has disclosed the details of the intention transaction negotiation with another potential counterparty other than Shenzhen Metro. According to market analysts, this may mean that Vanke’s restructuring plan B has begun to surface.
Vanke said in the announcement, "At present, the company is still negotiating with the potential counterparty, and it is uncertain whether the final transaction can be reached. According to the scope of the transaction assets currently negotiated by the two parties, the company expects that the amount of the intended transaction will not meet the requirements of major asset restructuring, and the company has no intention to issue shares as a consideration."
According to the analysis of market participants, the intentional transaction without issuing shares as consideration means that Vanke may purchase assets in cash or by issuing convertible bonds, and although the choice of the two schemes is still inevitable in the end, at least Vanke’s future prospects have already had the possible direction of the second choice. Whether Plan B is a "compromise" or a "break" for China Resources and Baoneng will become the focus of market attention.
Some insiders have analyzed that the potential opponent of this intentional transaction may be China Resources itself, or it may be another company that has not yet appeared. Previously, according to Watson’s description, China Resources did not object to Vanke’s introduction of partners, but it could not dilute China Resources’ shareholders’ rights and interests by issuing shares, and advocated that Vanke should increase its assets in cash before returning to China Resources’ position as the largest shareholder.
However, regardless of the content of Vanke’s reorganization plan B, the most urgent problem for Vanke at present is still what should China Resources and Baoneng do if they object to the plan with Shenzhen Metro? And how to face further verification by the CSRC and inquiries from the Shenzhen Stock Exchange.
Text/reporter Zhu Kaiyun