(Yicai Global) Feb. 24 -- Online rumors about large-scale redundancies, the suspension of year-end bonuses and the slashing of social security benefits at Baoneng Investment Group are not true, the Chinese real estate-to-finance conglomerate told Yicai Global today.

Baoneng has cut between 20 percent and 30 percent of its staff, cancelled the 2021 year-end bonus for all workers in its logistics unit and halted social security benefits to employees due to disagreements between the two brothers who founded the firm, Wind Finance News reported yesterday.

The Shenzhen-based firm laid off some employees, in particular those in the logistics division, around the Lunar New Year holiday earlier this month, according to a company insider.

Several executives in the logistics branch have reportedly also left the group, including Wu Haofeng, president of Baoneng Logistics, the person said. The president and executive vice president of its industrial real estate arm Baoneng Urban Development are also said to have resigned within the last three years.

Sibling Rivalry

The Baoneng Group, which controls around 40 companies that operate across 300 cities in the fields of real estate, fresh produce, logistics, microfinance, education, car manufacturing and healthcare, was set up in 1992 by Yao Zhenhua and his younger brother Jianhui.

Since then the two entrepreneurs have made a fortune, with Yao Zhenhua ranking 52nd on Forbes’ China Rich List in August last year. At the time, the firm, which once aspired to acquire leading real estate developer Vanke, had assets of CNY455.25 billion (USD70.47 billion).

However, there have been rumors circulating since the beginning of the year that the two brothers have fallen out and are to separate. The group’s property development arm Baoneng Holding will split off to become Laihua Holding and will be run by the younger brother, financial media Caixin reported earlier. Yao Jianhui will also remain in charge of the group’s residential property developers Glory Sun Land and Glory Sun Financial.

Yao Zhenhua, meanwhile, will stay in control of the group's industrial real estate unit Baoneng Urban Development, Foresea Life Insurance and his pet project, new energy vehicles, the report said.

"Baoneng Motor will strive to become a world-class heavyweight automobile group in the next 10 to 15 years," he once said. The EV manufacturer has made great progress in the last few years, performing much better in terms of sales than the younger sibling’s residential property development arm, which remains outside of the top 100 in the sector.

Editor: Kim Taylor