On October 15, court records revealed that Hainan Wanjun Management Service Co., Ltd. has recently filed a lawsuit against Dalian Wanda Group Co., Ltd., Wanda Real Estate Group Co., Ltd., and Wang Jianlin concerning a contract dispute. The court hearing is scheduled for November 3 at the Shanghai Second Intermediate People's Court.

Hainan Wanjun Management Service Co., Ltd. is jointly owned by Vanke's Shenzhen Yingda Investment Fund Management Co., Ltd., holding a 70% stake, and Zhuhai Hengqin Wanjun Investment Group Co., Ltd., holding 30%. This dispute between Wanda and Vanke stems from financial disagreements arising from their cooperation on a project in Changchun in 2019.

Reports indicate that in 2019, Wanda signed a strategic cooperation agreement with the Changchun municipal government, committing to invest 20 billion yuan to develop the "Changchun International Film City" project. Subsequently, Wanda partnered with Vanke to co-develop this project, where Wanda was responsible for the cultural tourism sector and Vanke for residential components.

In 2020, Hainan Wanjun, controlled by Vanke, acquired a 15% stake in Changchun Northern Film City Investment Co., Ltd. through capital increase. Between September 2019 and June 2020, Hainan Wanjun made payments totaling 5 billion yuan to Wanda's subsidiary, Wanda Real Estate, for this cooperation.

However, in June 2021, Vanke decided to terminate the partnership early for various reasons. Wanda has refunded Vanke 5.24 billion yuan, but disagreements have surfaced regarding the investment return settlements, leading to the financial dispute.

Vanke claims that the 5.24 billion yuan returned by Wanda consists of 4 billion yuan in principal and 1.24 billion yuan as interest accrued over approximately two and a half years. Vanke is seeking an additional 1.38 billion yuan through litigation, comprising 1 billion yuan in principal, 4.93 million yuan in interest, and 377 million yuan in penalty interest.

Wanda, however, disputes the need to pay Vanke an additional 1.38 billion yuan, arguing that the 5 billion yuan principal has already been fully returned along with 240 million yuan in returns. Wanda cites two reasons for not fulfilling the interest as per the contract: first, it took on nearly 10 billion yuan in infrastructure investment; second, Vanke acquired land priced at approximately 3,300 yuan per square meter, significantly lower than the neighboring land offered by China Resources Group at around 5,700 yuan per square meter—which equates to a savings of 1.63 billion yuan for Vanke.

Wanda contends that the sum of the 240 million yuan and 1.63 billion yuan accounts for 1.87 billion yuan, resulting in a total investment return yield of 37.4%. According to Wanda, paying Vanke the additional 1.38 billion yuan would bring Vanke's total earnings to 3.25 billion yuan, leading to a staggering 65% investment return rate. Therefore, Wanda remains opposed to this payment.

Due to the deadlock, on June 5, 2023, Vanke Group requested the court to freeze approximately 1.979 billion yuan worth of shares held by Dalian Wanda Group in Dalian Wanda Commercial Management Group Co., Ltd., with the freeze effective until June 4, 2026, lasting three years.

In response to the frozen shares, Wanda stated that there is a financial dispute of approximately over 1 billion yuan concerning the Changchun project. Wanda contended that Vanke's freezing of Wanda Commercial's 1.9 billion yuan worth of shares substantially exceeds the amount due in the financial dispute.

In July 2023, market rumors suggested that Vanke Group and Wanda Group had reached a near settlement regarding the financial conflict arising from their cooperation on the Changchun International Film City project. Reports stated that sources close to Wanda confirmed the claims, while those close to Vanke indicated no immediate comment.

More than two years later, both parties are once again heading to court. This legal battle highlights the immense debt pressures and urgent need for cash currently faced by both companies.