China Detains Fallen HNA Ex-Billionaire Chairman Ahead Of Airline Restructuring Vote

The English-language website of Chinese conglomerate HNA Group is dotted with photos of chairman Chen Feng accepting prestigious awards and international praise in 2017 and 2018. Articles include “HNA Group Chairman Joined UNICEF’s Inaugural International Council — UNICEF recognizes Chairman Chen Feng’s longstanding contributions to the United Nations and children’s causes on behalf of HNA Group.”  There’s also: “HNA Group Awarded Brand of the Year by the China General Chamber of Commerce, Presented by Blackstone CEO Stephen A. Schwarzman” as well as a biography note that “Mr. Chen was awarded the “Knights of the Oriental Art” by the Belgian Parliament in honor of HNA Group’s contributions to communications between the East and the West.”  Chen made his only appearance on the Forbes China Rich List in 2017, ranking No. 205 with an estimated fortune of $1.7 billion. A year earlier, the Harvard Business School published a case study titled “HNA Group: Global Excellence with Chinese Characteristics (B).”

Those days are long gone.  Chen has been detained by provincial authorities in China, according to a company announcement on Friday, in connection with suspected, though unspecified, crime.

HNA, which diversified from its core airline business to purchase stakes in companies ranging from Deutsche Bank to electronics distributor Ingram Micron in an investment spree reportedly totaling $50 billion, has been under a government-supervised restructuring this year following financial stress.   Unwinding of HNA

assets has notably included trophy and luxury property in New York.  Trading in its flagship Hainan Airlines Holding at the Shanghai Stock Exchange will be suspended on Monday in connection with a shareholder vote on restructuring that day. Those talks are being watched carefully for hints about the government’s plans for China Evergrande Group, the world’s most indebted real estate developer whose shares have collapsed amid default and contagion worries. China Evergrande New Energy Vehicle, its electric vehicle arm, said on Friday it wasn’t able to make all payments and was facing financial difficulty. (See post here.)

Chen has had a long career in aviation. He graduated from the Lufthansa College of Air Transport Management in Germany and received an MBA from Maastricht School of Management in the Netherlands, according to HNA’s website. Chen held positions at the Civil Aviation Administration of China and the National Air Regulations Bureau in China, and was an aviation business advisor to the governor of Hainan province where HNA is headquartered.

HNA Group CEO Adam Tan was also detained.

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@rflannerychina