China’s HNA reveals ownership details after US stake transfer
Non-profit foundation has taken the 29.5 per cent of company held by mysterious shareholder
HNA Group, the ultra-acquisitive Chinese conglomerate, has transferred ownership of a near 30 per cent stake in the business away from a mysterious Chinese shareholder to a newly formed foundation in the US.
The disclosure came as part of the first detailed breakdown of privately held HNA’s ownership structure after a period of intense scrutiny of the company, which has garnered attention for an aggressive overseas $40bn deal spree in the past three years.
In a statement, HNA said that a non-profit organisation called the Hainan Cihang Charity Foundation now owned 29.5 per cent of the company — a stake that was until recently held by Guan Jun, who acquired the position last year from Hong Kong-based businessman Bharat Bhise.
The Chinese company confirmed to the FT that Mr Guan, who serves as a co-chairman of a peer-to-peer financing platform owned by the Chinese group, no longer held any shares in the company. It added that the foundation that holds his stake was created in New York in December 2016 and only recently took control of Mr Guan’s shareholding.
The group, which started as a small domestic Chinese airline, has been forced to repeatedly deny allegations by an exiled businessman, Guo Wengui, that the family of Wang Qishan, one China’s most powerful politicians and the man who has led the country’s crackdown on corruption, has benefited from hidden ties to the company.
The speculation has also been fuelled by HNA’s continued ability to strike deals since the start of the year, including the purchase of a near 10 per cent stake in Deutsche Bank, even as other previously prolific, private Chinese conglomerates have seen their overseas dealmaking ambitions crimped by new domestic regulations.
When reached by mobile phone last month to discuss his investment in HNA, Mr Guan told the FT: “It is inconvenient to answer of any of your questions.” He could not be reached on Monday.
HNA’s unwieldy dealmaking spree has resulted in a complex corporate structure. It owns $145bn in assets, which it claims generate more than $90bn in annual revenues and employ more than 400,000 people. Its stakes are held across a range of industries from asset management and financial services to aviation and logistics.
The company has also sought politically connected partners. It invested in a fuel shipping business with Jeb Bush, when the son of a former US president was considering a presidential run, and it has agreed to buy SkyBridge Capital, a fund that invests in hedge funds, from its founder Anthony Scaramucci, who was just appointed as the communications director for the Trump administration.
On Monday, HNA also confirmed other details relating to its other major investors, which were previously revealed in the FT. Hainan Province Cihang Foundation, which is incorporated in China, owns 22.8 per cent of the business.
Chen Feng, HNA’s founder, and Wang Jian, its chairman, each own just under 15 per cent of the business. A further 10 individuals who are either executives or directors at the company hold the remainder of the company, comprised of stakes of no greater than 4 per cent.
“Although we are a private company with no obligation to disclose our ownership, we respect and appreciate the desire for transparency in this regard,” HNA said in a statement, adding that it planned to provide annual updates about its structure.
HNA said that the Cihang Foundation was created to further its philanthropic vision and that all shareholders pledged to donate all their shares to the foundation upon their resignation or death.
“These equity commitments not only provide a stable source of capital for the Foundation’s charitable work but also reflect our strong belief that wealth should be earned, not inherited, to encourage personal and public achievements,” HNA said. “We expect that the Cihang Foundation will one day own 100% of HNA Group. That has always been our intention.”