A HONG KONG-BASED fund has further increased its stake in China Vanke Co., the country’s biggest property developer currently embroiled in a high-profile power struggle, sending shares in Vanke higher.

    The total amount of Vanke shares owned by Nexus Capital Management remains small, but the fund is reportedly close to China Evergrande, the country’s second-largest property developer which has recently built up a near 7 percent interest in Vanke. That in turn has fanned market speculation that Vanke’s shares will continue to be in demand.

    Vanke, which has a market value of nearly US$40 billion and annual revenue of US$28 billion, is battling financial conglomerate Baoneng which has acquired 25 percent of the company over the past year and has tried to oust its board.

    The emergence of Evergrande as a key shareholder has taken the market by surprise. Neither Evergrande nor Nexus have made intentions concerning their holdings in Vanke clear.

    Nexus said in a stock exchange filing yesterday that it has marginally lifted its holding to own 11.5 percent of Vanke’s Hong Kong-listed shares. That represents a 1.4 percent interest in total shares of Vanke, which is also listed in Shenzhen.

    Nexus first reported a 7.3 percent interest in Vanke’s Hong Kong shares Aug. 9 and lifted its stake at least three times since.

    Hong Kong newspaper Mingpao reported this month that Nexus Capital is owned by Cheung Chung-kiu, chairman of property developer C C Land and a good friend of Evergrande chairman Hui Ka-yan.

    Fearing a hostile takeover by Baoneng, Vanke’s management announced in June a US$6.9 billion deal with white knight Shenzhen Metro Group but it is unclear whether it will succeed.

    Both Baoneng and China Resources, Vanke’s second-largest shareholder with a 15 percent holding, have said they oppose it. China Resources has not, however, sided with Baoneng in its efforts to oust the board.

    (SD-Agencies)