Vanke's New Investor Got Funds in Way Analysts Say Is Risky

(Beijing) – Most of the capital that Baoneng Group has used and plans to use to take control of China's largest property developer came from bank wealth management products funneled through a complex and highly leveraged arrangement that analysts say is risky.

A recent showdown between Baoneng and the management of China Vanke Co., the country's largest residential property developer by sales, has captured broad attention. Wang Shi, Vanke's founder and chairman, waged a battle against Baoneng, trying to thwart what he said was a hostile takeover by a firm that lacks "credibility" and relies on questionable means to finance the acquisition.