HONG KONG (Reuters) - The chief architect behind Dalian Wanda Group's $4.4 billion buyout to take its flagship Hong Kong-listed property arm private and relist it in China has resigned without seeing the plan through, according to an internal memo.
The resignation of Lu Xiaoma from the post of vice president of Dalian Wanda Financial Group signals the difficulties the conglomerate, owned by China's richest man, Wang Jianlin, is having listing the property business in China, analysts said.
Wang has yet to find a suitable shell company and gain regulatory approval for the listing of Dalian Wanda Commercial Properties on the Shanghai bourse, where it hoped to attract a valuation much higher than in Hong Kong.
"This is not a good time for backdoor listings in China, and Wanda made too much noise about it," a person close to the company said, requesting anonymity because they were not authorized to speak to the media.
"Policy arbitrage shouldn't have been the official reason for a delisting."
The company memo dated Dec. 2 announcing Lu's departure cited only "personal reasons" for the 50-year-old's resignation. The memo circulated on social media on Monday and was confirmed by a company insider on Tuesday.
In addition to the post of Dalian Wanda Financial Group, which was set up in October last year, Lu also resigned from the role of chief executive officer of Wanda Investment Co, a unit of the financial group.
Dalian Wanda declined to comment and Lu did not respond to a request for comment.
Insiders have told Reuters that Lu, a former executive of the Shenzhen bourse, was the originator of the idea to delist Wanda Commercial Properties from Hong Kong with the goal of relisting in mainland China.
Wang hand-picked him in an open-hiring process to spearhead the plan.
But the strategy has proven more difficult than expected as China's securities regulator has increased scrutiny of backdoor listings due to concerns over the huge valuation gap between domestic and overseas stocks, and amid concern over speculation in shell company shares.
Reporting by Clare Jim; Additional reporting by Elzio Barreto; Editing by Stephen Coates