After China Vanke's largest shareholder Baoneng Group sought a board meeting to oust the real estate's chairman and 11 other executive directors, its second largest shareholder China Resources has made it clear that it does not support the move.

"China Resources objects to the proposal to remove the entire Vanke board of directors and board of supervisors," the conglomerate said on its social media account. Although it did not explain why it opposed an ouster, China Resources said it will consider a future board restructuring "from a perspective that is beneficial to the company's development."

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China Resources, which holds 16 percent of China Vanke's shares, warned that the announced transaction that would dilute their holdings, the Financial Times reported.

The statement has somehow relieved some tension that has been building in the company after Baoneng called for a special holder meeting. According to South China Morning Post, the dispute has been disrupting Vanke's daily operations, with some Vanke employees in masks and banners staging a protest in front of the Shenzhen local government office.

Baoneng, on the other hand, seems to have pacified its aggressive stance, saying "removing directors does not necessarily mean removing core management."

The conciliatory stance followed after China's securities regulator revealed that the bourse would investigate Vanke's plan for restructuring and are probing into the board meeting's development and roles of its independent directors.

"The bourse's enquiries have shown that regulators don't only care what is happening at the corporate level, but also care about what is happening at the market level and whether small shareholders are being protected," David Yang, an UOB Kay Hian analyst, said.

Tagschina vanke, China Resources, Baoneng Group