The protracted battle for control over the Hong Kong-listed property management firm Xinyuan PM (01895.HK) has reached a decisive conclusion. The company recently announced the results of several resolutions voted on during a special general meeting held on June 26.

According to the announcement, all proposed resolutions passed with 285,145,999 votes in favor and zero against. These included the removal of Executive Director and Board Chairman Shen Yuanqing, the removal of Independent Non-Executive Director Lan Ye, the appointment of Feng Bo as an Executive Director, the appointment of Tian Wenzhi as a Non-Executive Director, the appointment of Zhao Xia as an Independent Non-Executive Director, and the declaration of a final dividend of HK$0.0191 per share.

Public records show that Zhang Yong founded the Xinyuan Group in Zhengzhou, Henan province, in 1997. The group's property development arm, Xinyuan Real Estate, is the ultimate controlling shareholder of Xinyuan PM, with founders Zhang Yong and his wife Yang Yuyan serving as the ultimate controlling persons.

In 2022, Xinyuan PM was suspended from trading and faced delisting risks after its controlling shareholder, Xinyuan Real Estate, improperly pledged a HK$402 million term deposit belonging to the subsidiary. During this crisis, Zhang Yong invited Shen Yuanqing to take the role of Board Chairman. Shen, aged 61, subsequently took on key roles including Executive Director, Chief Executive Officer, and Authorized Representative, and successfully guided the company to resume trading in June 2024. Shen previously held positions at companies including Kingdee Software, Inspur International, Microsoft, and JD Cloud.

The recent internal conflict reportedly began in late April when the board dismissed three directors, including Feng Bo, Tian Wenzhi, and Zhao Xia.

On June 1, major shareholder Xinyuan Real Estate, which holds a 41.56% stake in Xinyuan PM, issued a formal statement publicly airing the grievances. The statement alleged that Shen Yuanqing, without any communication with the controlling shareholder or following due legal procedures, announced the appointment of five new "directors" and dismissed three directors without proper justification. It characterized these actions as an "illegal restructuring" that caused severe disruption to the company's corporate governance. The statement further claimed that several core senior executives had been dismissed without cause, severely impacting the stability of the management team.

Industry analysis suggests the root cause of this control struggle lies in the inseparable operational ties between Xinyuan PM and its parent company, Xinyuan Real Estate. As a property management firm spun off from a Henan-based developer, Xinyuan PM, like many similar listed entities, was historically highly dependent on its related party for business. However, the worsening financial crisis at Xinyuan Real Estate reportedly led Shen Yuanqing to actively pursue a "de-property development" strategy, which further intensified the conflict.

Beyond the fight for board seats, issues related to executive compensation disclosure have also become a central point of contention. The June 1 statement from Xinyuan Real Estate mentioned it had received relevant reports alleging significant inaccuracies in the disclosure of Shen Yuanqing's remuneration.

On April 23, Xinyuan PM issued a clarification announcement, acknowledging it had failed to disclose the combined remuneration of HK$19.886 million for three executive directors in its 2023 and 2024 annual reports. Shen Yuanqing's originally disclosed 2023 remuneration of HK$1.638 million was corrected to HK$7.263 million, and his 2024 remuneration was corrected from HK$6.886 million to HK$13.886 million. For Shen Yuanqing alone, the cumulative undisclosed amount over the two years totaled HK$12.625 million.

For a regional property management company with 2023 revenue of approximately HK$900 million and a net profit of HK$99.428 million, this is a significant sum. Xinyuan PM did not provide a specific explanation for the omission, merely stating in the announcement that it was an "unintentional oversight."

It is noteworthy that, according to Xinyuan PM's latest announcement, the newly appointed Board Chairman Feng Bo's term is only two months. This suggests the company's management may remain unstable in the near term. Additionally, the company's shares were suspended from trading on the afternoon of June 26 and had not resumed trading at the time of reporting, with the resumption date pending a further company announcement.