Date
26 September 2017
Founders Chen Feng (above) and Wang Jian hold about 47.5 percent of the group, according to a company statement. Photo: Bloomberg
Founders Chen Feng (above) and Wang Jian hold about 47.5 percent of the group, according to a company statement. Photo: Bloomberg

HNA reveals ownership amid mounting pressure

HNA Group Co. disclosed it’s controlled by a couple of charities as the acquisitive Chinese conglomerate, whose overseas investments have come under scrutiny, seeks to dispel concerns about its ownership structure, Bloomberg reports.

Two charities named Cihang — one based in New York and the other in the resort island of Hainan — own 52 percent of HNA Group, according to a company statement on Monday. Twelve HNA officials including founders Chen Feng and Wang Jian hold about 47.5 percent, with the rest held by Hainan Airlines Holding Co., according to the statement.

The statement represents HNA’s most detailed disclosure about its ownership and comes as the group faces increasing scrutiny — and as it tries to purchase the hedge-fund firm of White House communications director Anthony Scaramucci.

Bank of America Merrill Lynch has told investment bankers to stop working on transactions with HNA for now amid growing concerns about the group’s debt levels and ownership structure, people familiar with the matter said last week.

New York-based Hainan Cihang Charity Foundation Inc. owns 29.5 percent of the group, followed by China-based Hainan Province Cihang Foundation’s 22.75 percent. Among the executives, Chen and Wang — who are both co-chairmen — hold the highest stakes with 14.98 percent each.

Little is known about how the philanthropic organizations are managed and how votes are cast, although the company says its donations have reached tens of billions of yuan.

HNA said it plans to update its ownership status annually and that the executives plan to donate all their shares to the charities should they resign or die. Eventually, HNA expects the foundations to own 100 percent of the group.

The figures differ from available data as recently as late last year, when corporate filings showed that a businessman named Guan Jun owned a 29 percent stake via two holding companies. Guan doesn’t show up in HNA’s latest statement.

Little is known about Guan. HNA has played down his role, with CEO Adam Tan saying he’s just a Chinese businessman and chairman Chen Feng telling the South China Morning Post newspaper that Guan isn’t a significant shareholder as he only owns a “tiny” stake. Yet, the corporate filings showed Guan owned a bigger stake in the group than both Chen and Tan’s stakes combined.

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