Vanke launches a major anti-corruption crackdown

(Source: Real Estate Whale’s Downfall)

Vanke is going through the most severe and thorough anti-corruption storm in its forty years since its founding. This storm is not an isolated case. Rather, during the deep adjustment period of Vanke in the real estate industry, it has concentrated exposure of systemic governance problems accumulated during its rapid expansion, an aggressive financial innovation model, and an internal interest-transfer network. From 2022 to March 2026, at least 13 core executives have been investigated, sentenced, or subjected to criminal coercive measures. They cover every management level, from the group’s chairman and president down to project general managers in localities, marking a historic reckoning for the company that was once an industry “top student,” as it shifts from being led by professional managers to being deeply controlled by state-owned capital.

I. The Storm’s Epicenter: The Map of Investigated Executives and Key Cases

This anti-corruption storm shows characteristics of shifting from individual embezzlement cases to systematic financial violations, and from scattered local project cases spreading into the full collapse of the group’s core management.

1. Collapse at the Highest Level of the Group: The Unraveling of an Off-Balance-Sheet Financial Empire

The core of the storm directly targets Vanke’s massive “off-balance-sheet financial empire.” The original group president and CEO Zhu Jisheng is the “eye of the storm.” On January 15, 2025, he was first summoned and taken away by the public security authorities. On January 27, he resigned from all posts “for health reasons.” In October of the same year, on October 14, it was confirmed that he had been subjected to criminal coercive measures. The investigation focuses on the operation of the off-finance platforms within the Vanke system under his purview, mainly including:

• Pengjinsuo (Shenzhen Pengjinsuo Internet Financial Services Co., Ltd.): Zhu Jisheng previously served as its chairman and general manager. The platform is alleged to be involved in disguised self-dealing and illegal fundraising. Its operating model is that Vanke deposits idle funds such as project sales receivables and taxes payable into a related Vanke finance company at an annualized interest rate below 2%. The latter then injects the funds into Pengjinsuo. Pengjinsuo issues “co-investment loans” to Vanke employees at an interest rate of 10% or higher, for project co-investment that is forced or semi-forced; at the same time, it also provides loans to Vanke’s suppliers and construction units with annualized interest rates as high as 18%-24%. Ultimately, these funds flow back to Vanke projects through complex channels, forming a closed loop of “Vanke funds – Pengjinsuo – employees/cooperation partners – Vanke projects.” In July 2024, Pengjinsuo’s wealth management products experienced widespread overdue payments, the capital chain broke, and the amount of outstanding unpaid funds was about 800 million yuan.

• Bosang Asset Management Co., Ltd.: As an important off-balance-sheet investment and financing platform for Vanke, it is known in the market as “shadow Vanke.” The platform was founded by former Vanke employees and is closely related to Vanke’s enterprise equity center. Bosang asset management carries out off-balance-sheet financing by setting up limited partnership enterprises, bringing in funds from financial institutions such as China Merchants Fund, Ping An Fund, and Everbright Trust, using “minor equity stakes” to leverage “large capital,” and making special investments in real estate projects under Vanke. Its executive director and general manager He Zhuo has also been under the control of the investigating authorities since early 2025, closely related to the case of Zhu Jisheng.

2. The Downfall of the “Firefighter Captain”: A Brief Tenure at the Helm of the Chairman of the Shenzhen Metro System

In January 2025, when Vanke’s crisis was severe, Xin Jie was sent in by the major shareholder Shenzhen Metro Group and was tasked with managing the situation, replacing Yu Liang as chairman. However, this chairman, viewed as a “firefighter captain,” only held the helm for 9 months. On September 18, 2025, while attending a meeting in Shenzhen, he was taken away for investigation, and on October 12, he resigned from all posts “for personal reasons.” Market analysis believes his problems may be traced to his project operations and use of funds during his tenure at the Shenzhen Metro Group, rather than directly stemming from Vanke’s operations. His being investigated signifies the deep cleanup of Vanke’s historical issues after the major shareholder took full control, and also reflects the reshaping of the former power structure after deep state-owned capital involvement.

3. Corruption Cases in Local Projects: From Sichuan to Shandong

Corruption in local projects is another main thread. The case of Cheng Lindong (former chairman of Sichuan Vanke Meizhou Real Estate) is a typical example that has already been tried and sentenced. He colluded with Yu Peng, the former deputy district governor of the Dongpo District Government of Meishan City, and with project manager Zhang, using the sand and stone mining rights of the Vanke Chongli New Town project (Vanke Meizhou Cultural Village) to bribe the contractor with a total of 18 million yuan, of which Cheng personally received 11 million yuan. In April 2024, Cheng Lindong was sentenced to eleven years in prison for bribery and fined 1 million yuan. This case directly led to related land parcel project work being halted and turning into a dead end; the originally scheduled handover date of December 2024 was postponed to 2027.

In addition, Xiao Jing, the former general manager of Jinan Vanke, was taken away for investigation by Shandong police in April 2024 (Vanke’s official characterization was “a personal case”); Li Shengyang, the former general manager of urban renewal in the Southern Region of Vanke, was taken away by Foshan police in May 2023 to assist with the investigation, involving old cases from more than ten years earlier during his tenure at Foshan Vanke.

4. Continued Fermentation in 2026: Even Former Executives Cannot Escape

As of March 2026, the storm is still ongoing, showing a determination to “review the past” and “pursue responsibility” regardless of the timing or whether the individuals are currently in office.

• Wu Zhongyou (former general manager of Guiyang Vanke) was taken away for investigation in March 2026. The investigation focuses on issues that arose more than ten years ago during the period when Guiyang Vanke cooperated with multiple large local state-owned enterprises on development projects, potentially involving interest transfers in areas such as land acquisition and project subcontracting.

• Wang Runchuan (former secretary to Vanke’s chairman, and former general manager of Yunnan Vanke) was taken away for investigation around the same time. He had long served as Yu Liang’s secretary and then led Yunnan Vanke. He increased sales revenue from about 20 billion yuan to nearly 200 billion yuan. In April 2024, he left his post on the grounds of “further studies in Hong Kong and Shenzhen,” but ultimately he was unable to evade the investigation.

• zy (general manager of the Shenzhen Vanke Zhenshanfu project): it is said that he was taken away by criminal investigation in March 2026, involving a series of financial operations by Bosang Asset Management from that year.

• Li (Li) (human resources general manager of the Northwest Region), around August 2025: Vanke Group’s audit department investigated him for alleged embezzlement carried out by using performance assessment and authority over promotion approvals.

• In January 2026, mqs, the former head of the business support department of the Beijing regional company of Vanke’s Wanwu Cloud and Wanwu Liangxing, was reported for violations and illegal conduct including alleged misappropriation of duties. On January 7, 2026, Vanke Group’s internal organization received an anonymous letter of report, addressed to fewer than 400 managers in Vanke Group across city-level business segments. The sender claimed to be multiple informed employees. According to insiders, during the current filing and investigation, the Shenzhen Metro system is now “reviewing the past” as well.

5. The Exit and Cooperation of the Founding Core

The path of founder Yu Liang is even more complex. On January 27, 2025, he stepped down as chairman of the board and became executive vice president. In October 2025, he reportedly cooperated with the relevant authorities on an investigation for about a week, and then returned to his work post. Ultimately, on January 8, 2026, due to reaching the statutory retirement age, he resigned from all posts including director and executive vice president. In March 2026, Yu Liang stepped down as the statutory representative of Vanke, with Huang Liping of the Shenzhen Metro system taking over, marking the official end of the “Yu Liang era.” There were market rumors that he went missing, but Vanke officially refuted them. Some analyses suggest that his “technical retirement” was in fact to cooperate with the investigation, thereby stabilizing the company’s credit and advancing the process of extending debt maturities.

II. Systemic Crisis: Off-Balance-Sheet Financing, Distorted Co-Investment, and Loss of Governance Control

The concentrated outbreak of executive problems is rooted in a complex and hidden operating system that Vanke built during the industry’s upcycle. This system fully blew up during the downturn.

1. Operation and Risk of the “Shadow Banking” System

Centered on Pengjinsuo and Bosang asset management, Vanke built a large off-balance-sheet financing network. It had two purposes: first, to break through the debt ratio regulatory limits for listed companies and provide funding for project expansion without increasing off-balance-sheet liabilities on the financial statements; second, to transfer interests through a high interest spread (absorbing company funds at low interest and lending at higher interest to employees and cooperation partners). This cycle intercepts profits at the listed company level layer by layer, and ultimately flows into off-site platforms controlled by management, forming an independent kingdom of funds separate from listed company regulation and practically controlled by management.

2. The Distortion of the “Small Stake, Playing the Deal” and the “Co-Investment System”

Vanke’s “small stake, playing the deal” model (only contributing 5%-10% equity but dominating project operations), which it once took pride in, later mutated. When projects generated profits, profits of 30%-40% or even higher would be taken through affiliated companies (such as the partnership enterprises established by Bosang asset management), while cooperation partners bearing most of the capital risk only received small gains. This essentially constitutes squeezing the interests of cooperation partners and transferring listed company profits.

What was originally intended as a co-investment system to bind employees and align with company interests evolved into a tool for executives to arbitrage and to shift risk. Executives raised funds through low-interest loans (such as from Pengjinsuo) to invest in the co-investment company, and then invested in projects to obtain high returns. When projects face risks, executives could use information advantages to withdraw capital first, shifting losses onto ordinary employees and cooperation partners. During the industry downturn, many co-investment employees ended up losing everything.

III. The Financial Abyss and State-Owned Capital Takeover: The Survival Crisis Behind the Storm

Another background to the anti-corruption storm is Vanke’s unprecedented financial and survival crisis.

1. Record Losses and Heavy Debt Pressure

As of the third quarter of 2025, Vanke’s financial situation was extremely dire:

• Continuous massive losses: 494.78 billion yuan in losses in 2024 (the first annual loss in 31 years since listing), and 820 billion yuan in pre-losses in 2025; across two years, total losses exceed 1,314 billion yuan.

• Debt piling up: total interest-bearing liabilities of 362.9 billion yuan, of which 155.4 billion yuan of debt due within one year, while monetary funds were only 65.7 billion yuan. The cash-to-short-term-debt ratio fell as low as 0.43 (far below the safety line of 1.0), and the funding gap exceeded 90 billion yuan.

• Weak sales: in the first three quarters of 2025, revenue was only 161.39 billion yuan, a significant year-on-year drop. The gross margin of the real estate development business has fallen to 2.0%, leaving almost no profit.

2. Deep State-Owned Capital Involvement and Governance Reshaping

In the face of the crisis, major shareholder Shenzhen Metro Group transformed from a financial investor into a strategic controller, initiating a comprehensive takeover:

• Personnel shake-up: in January 2025, Xin Jie replaced Yu Liang as chairman. In October, after Xin Jie was investigated, Huang Liping of the Shenzhen Metro system took over. In January 2026, Yu Liang retired. In March, Huang Liping replaced Yu Liang as Vanke’s statutory representative. More than 15 personnel from the state-owned capital system entered Vanke’s core positions.

• Organizational structure revolution: in September 2025, Vanke launched its “largest” organizational structure adjustment in 40 years. It abolished the “group-region-city” three-tier structure that had been running for nearly 20 years, and shifted to a two-level flat management model of “headquarters-city companies,” with centralized power at headquarters and weakening the power once held by “regional warlords.”

• Audit special teams entering and continuous “capital infusions”: Shenzhen Metro Group dispatched work teams to fully take over operations and conduct a comprehensive cleanup of historical issues. At the same time, Shenzhen Metro has cumulatively provided Vanke with more than 30 billion yuan in shareholder loans to ease its debt repayment pressure.

IV. Industry Symbol: The End of an Old Era

Vanke’s anti-corruption storm is far from just an internal cleanup of one company. It symbolizes the complete end of the era when China’s real estate industry raced forward on high leverage, high turnover, and complex financial operations. Evergrande, Country Garden, and Vanke had very different styles, yet they all fell into similar predicaments: Evergrande was defeated by high leverage and aggressive diversification; Country Garden was trapped by extreme high turnover; and Vanke, which appeared most financially stable, ended up stumbling in off-balance-sheet compliance and shadow financial platforms. The systemic outbreak of corruption problems, stacked with the industry downturn and model failure, forced companies and major shareholders to do “cutting out diseased flesh to heal,” fundamentally clearing historical entrenched problems.

As industry insiders put it: “Vanke’s today is China’s real estate tomorrow. An era that relied on leverage and cycles ends, and an era that returns to living, compliance, and common sense begins.” This ongoing storm is not only the starting point for Vanke to bid farewell to the past and be reborn through hardship; it is also a harsh prologue for the entire industry to seek a new beginning amid pain.

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