Baoneng's Highly Leveraged Move on Vanke Raises Risk Concerns

(Beijing) — Baoneng Group's highly leveraged move on China Vanke Co. Ltd. has raised concerns about liquidity risks and the existence of loopholes in China's financial system.

Chinese insurer Baoneng became the top shareholder in the giant residential property developer with a 25% equity stake it bought for more than 40 billion yuan ($5.8 billion), which it raised through the sale of policies and other investment products.