HONG KONG, June 20 — China Vanke's second-biggest shareholder increased its opposition to a planned $6.9 billion purchase by China's biggest property company that would see it issue shares to a white knight, raising doubts whether the deal will go ahead.

State-owned China Resources Group, which owns 15.3 per cent of Vanke and has three board seats, voted against the deal by Vanke to buy a unit of Shenzhen Metro Group by issuing new shares which would make the state-owned subway operator its largest shareholder. Vanke said on Friday the deal was approved by its board, with seven “yes” votes out of 10.

The deal came as Vanke's management fights to retain control of the company in a battle with its current biggest shareholder, financial conglomerate Baoneng, whose shares would be diluted to 19.3 per cent after the deal completes. Shenzhen Metro and China Resources would hold 20.6 per cent and 12.1 per cent, respectively.

But China Resources on Saturday challenged Vanke's statement that the transaction had been approved, saying the two-third majority of votes requirement had not been met if the 11th board member who abstained from voting is taken into consideration.

“Over two-third of the board should be eight people... so China Resource thinks this proposal has not been approved,” China Resources said in a statement posted in its Weibo account.

“China Resources expresses strong dismay to Vanke announcing an approval of the deal before serious consideration of its board directors' opinions,” the company said, adding it will continue to vote “no” in the next board meeting and the shareholder meeting to block the deal.

China Resources' comments add uncertainty to the deal as Baoneng is also likely to vote against it, analysts said.

“We believe the relationship (of the management) will become increasingly tense,” Citi analyst Oscar Choi said in a report on Sunday, adding the purchase will dilute Vanke's earnings per share by 6-21 per cent in 2016-2018 and net asset value per share by 1.8 per cent.

Vanke's shares in Hong Kong fell 2.9 per cent this morning, versus a 1.1 per cent rise in the broader market. Its Shenzhen-listed shares have been suspended from trading since December. — Reuters