China’s HNA Discloses Shift of Ownership Stake to Foundation


The acquisitive Chinese conglomerate HNA Group moved to allay concerns about its ownership structure on Monday by releasing a statement showing that its biggest shareholder had recently shifted from a mysterious businessman to a foundation it set up in New York.

The company said that its largest shareholder, a private businessman in China named Guan Jun, had recently donated his 30 percent stake in the company to HNA’s charitable organization, the Hainan Cihang Charity Foundation. Combined with the 22.8 percent stake held by HNA’s sister charity in China, HNA says it is now 52 percent owned by the Cihang foundations.

HNA, which began as a regional airline and now has a global portfolio of assets, including stakes in Hilton Hotels and Deutsche Bank, made the announcement in a statement addressed to its employees, customers and partners. The company did not explain who Mr. Guan is or why he chose to make the donation. It said only that he was a private investor who has never held a position with the HNA Group.

The company has gone on an aggressive acquisition spree over the last three years, snapping up hotels and logistics companies among other businesses. It is now an operation with close to $100 billion in revenue and 400,000 employees worldwide.

As a result, HNA has been questioned about the identity of Mr. Guan, and how a 30-something Beijing businessman came to acquire a stake in the company that was bigger than those of its founders, which include the chairmen Chen Feng and Wang Jian, each of whom owns about 15 percent of the company.

HNA’s murky ownership structure is one reason Bank of America recently decided not to do business with the company, according to an internal email reviewed by The New York Times. Analysts say HNA is also under pressure to clarify the ownership structure as it seeks to win regulatory approval for deals in the United States and Europe.

In particular HNA is awaiting approval from United States regulators to complete its acquisition of SkyBridge Capital, a New York-based investment fund that was partly owned by Anthony Scaramucci, who became President Trump’s White House communications director last week.

In an interview with Reuters, Adam Tan, HNA’s chief executive, maintained that his company had a strong relationship with Wall Street banks, saying that Bank of America was the only one to stop working with HNA.

“I think we are operating our company legally, we have nothing to hide, and we are fine,” Mr. Tan told Reuters.

The HNA Group disclosed that its largest shareholder, Guan Jun, had recently donated his 30 percent stake in the company to HNA’s charitable organization, the Hainan Cihang Charity Foundation. The private businessman has a residence here in Beijing. CreditGilles Sabrie for The New York Times

The decision to release new details about its ownership structure also seems aimed at countering allegations made on social media by a fugitive Chinese billionaire named Guo Wengui. For months, Mr. Guo has been posting images and documents on Twitter and broadcasting video on YouTube alleging that HNA has bribed high-ranking officials and given the relatives of at least one senior government official a major stake in the company — possibly through Mr. Guan.

HNA has strongly denied the corruption allegations and vowed to file a defamation suit in New York State against Mr. Guo, who once had close ties to China’s top spying agency. And China has said Mr. Guo is wanted in connection with bribery and corruption cases in China. Mr. Guo could not be reached for comment.

HNA is a privately held corporation with more than a dozen publicly traded affiliates inside China. But as it has ventured overseas, its shareholding structure has been disclosed in filings with overseas investors in its bonds, and regulatory filings.

Some of those filings show that nearly 30 percent stake had shifted in recent years to several offshore companies controlled by either Bharat Bhise, a longtime company adviser who runs Bravia Capital, or Mr. Guan, the businessman.

Mr. Bhise has declined repeated requests for an interview. And Mr. Guan could not be reached for comment.

But corporate records show that Mr. Guan is associated with several private companies that did business with HNA or its affiliates, including Pacific America Beijing Investment Consulting Company, where he serves as a director alongside Daniel Chen, the son of an HNA chairman, Chen Feng.

In a front-page article last week, The Times detailed how HNA, with little disclosure to investors in its listed companies or overseas bonds, has regularly given business to relatives and associates of the company’s senior executives.

In its statement Monday, HNA said it would begin to release its shareholder structure on an annual basis because “it is only natural that as we touch many more stakeholders, there is a great deal of interest in who we are and how we are structured.”

The company did not, though, give many details about the Cihang Foundation, which in China is run by a former government official. But the company has said that its senior executives have pledged to eventually donate almost all of their shares to the foundation.

In the United States, the Cihang Foundation recently made a donation to Harvard University to help pay for a facility being built on its new science and engineering campus.

By Michael Forsythe contributed reporting.
The New York Times


Please enter your comment!
Please enter your name here