Chinese police take away HNA chairman, CEO on suspicion of crimes
SHANGHAI — China’s HNA Group, once one of the country’s most
acquisitive conglomerates, said on Friday that its chairman and its chief
executive had been taken away by police due to suspected criminal offenses.
The company, placed in bankruptcy administration in
February, said in a statement on its official WeChat account it had been
notified by police in its home province of Hainan, southern China, that
Chairman Chen Feng and CEO Tan Xiangdong had been taken.
“The operations of HNA Group and its member companies are
stable and orderly, and the bankruptcy and restructuring work is progressing
smoothly according to the law,” the company said.
A separate HNA statement on Friday said the company’s
Communist Party members were informed in a meeting that police had taken away
Chen and Tan. Attendees were urged to strengthen the party’s leadership in HNA.
In the 2010s HNA Group, whose flagship business is carrier
Hainan Airlines, used a $50 billion global acquisition spree, mainly fueled by
debt, to build an empire with stakes in businesses from Deutsche Bank to Hilton
Worldwide.
But its spending drew scrutiny from the Chinese government
and overseas regulators. As concerns grew over its mounting debts, it sold
assets such as airport services company Swissport and electronics distributors
Ingram Micro to focus on its airline and tourism businesses.
In early 2020, after the COVID-19 pandemic paralyzed travel
demand, the Hainan government sent in a work group to HNA to help resolve its
liquidity problems.
Last week HNA said it would be reorganized into four
independently operated sections, including ones for aviation and financial, and
that all equity held by its old shareholders would be wiped out after the
reorganization.
Chen, 68, became HNA’s sole chairman in 2018 when his
co-founder and then co-chairman Wang Jian died in France in what local police
said appeared to be an accidental fall from a wall while posing for a
photograph.
54-year-old Tan Xiangdong, also known as Adam Tan, became
HNA Group’s CEO in 2016. He stepped down as chairman of Dublin-based aircraft
leasing giant Avolon, in which HNA affiliate Bohai Leasing owns a majority
stake, in February this year.
A filing to the U.S. Securities and Exchange Commission for
Park Hotels & Resorts Inc., dated March 15, 2017, indicates that Tan is a
U.S. citizen.
Hainan Airlines said in a filing to the Shanghai Stock
Exchange earlier on Friday that trading in its shares would be halted on
Monday, as participants in its restructuring meet for discussions, and would
resume on Tuesday.
The stock is up 48% year-to-date.
Chinese stocks have been rattled in recent weeks by concerns
over the financial health of property developer China Evergrande Group, a
collapse of which could send shockwaves through China’s economy and beyond.
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