A key Communist Party-led committee at troubled Chinese conglomerate HNA Group left out the company founder Chen Feng from a list of members, raising doubts about his future at the group that’s now being managed by the state.
Chen, 67, who led the panel previously, is no longer part of it after the latest election on Tuesday, according to a company statement. Chen’s exit from the important decision-making body with powers similar to the company’s board is a sign that he’s losing control of the group, the South China Morning Post reported earlier on Wednesday.
Once a prominent shareholder of firms like Hilton Worldwide and Deutsche Bank, HNA is the embodiment of a short-lived era when Chinese conglomerates expanded aggressively with global acquisitions fueled by debt. Weighed by more than $75 billion of debt even after shedding assets, the group’s core aviation business suffered during the coronavirus pandemic, triggering the government of Hainan -- the southern island province where HNA is based -- to move in and take charge in February last year.
The party committee will now be led by Gu Gang, who heads a government-appointed working group overseeing the company’s liquidity risk. Chen still remains chairman of the company. The working group has finalized a plan to manage HNA’s risks and the next step will be execution, the company said in a statement late last week. Marking the end of the first phase of the program, Gu resigned as HNA’s executive chairman but keeps his leading role in the working group.
Last year, a Chinese court clamped down on Chen’s ability to spend on non-essential items such as traveling for leisure and purchasing property, after HNA failed to comply with a ruling in a contract dispute case. Chen, along with partner Wang Jian, founded HNA in 1993, starting with Hainan Airlines. Wang died in 2018 following a fall from a high wall in a southern French village, according to local police.
Starting 2018, HNA has sold tens of billions of dollars in assets including stakes in Hilton Worldwide and Deutsche Bank -- purchases that brought the company into international limelight between 2016 and 2017.
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