HNA chairman’s family tightens grip on company

  • Business
  • Tuesday, 21 Aug 2018

HONG KONG: HNA Group Co chairman Chen Feng promoted two family members as key lieutenants this month, tightening his family’s control over the embattled Chinese conglomerate after the sudden death of a top executive.

His son has been promoted to deputy chief executive officer of the group and would be responsible for HNA’s international business, according to people familiar with the matter.

Earlier this month, the 65-year-old chairman appointed his 30-something nephew as chief investment officer of the group and executive chairman of an investment unit.

The management changes come as Chen seeks to persuade banks, investors and the government to restore their confidence in a group that’s saddled with one of the biggest piles of debt in corporate China – more than US$85bil as of the end of December.

The death of HNA co-chairman Wang Jian last month threw a wrench at the company’s normalisation plans as Wang was said to be the mastermind behind the purchase of many of the assets that are now being sold.

“Changes at HNA that international investors would like to see may not come so soon,” said Warut Promboon, managing partner at credit research firm Bondcritic Ltd.

“The appointment of family members to run the business shows us HNA remains a traditional Asian company.”

HNA was at the forefront of an unprecedented shopping spree by acquisition-hungry firms seeking out high-profile assets around the world before the Chinese government started reining them in last year amid concerns about unsustainable corporate debt levels.

The company also caught the attention of regulators in the United States and Europe over questions about its ownership.

As to incoming deputy CEO Daniel Chen, he was appointed in June as an assistant to the late co-chairman and prior to that, chairman Chen’s son was president of HNA North America LLC.

This month, he and his cousin were put on the board of Swissport Group, a luggage handler that HNA acquired in 2015.

Adam Tan remains CEO of the group.

According to Chen’s profile at New Jersey’s Pingry School, where he became a trustee, he is also vice-general secretary at the Cihang charity that serves as a big shareholder of HNA Group, and president of investment firm Pacific American Investment Ltd.

He received a Bachelor of Science in industrial engineering from the University of Washington and completed Harvard Business School’s China business leader executive training programme, according to the profile.

Then there’s the chairman’s nephew.

HNA named Dennis Chen, or Chen Chao in Chinese, as CIO of the group in early August, and promoted him to executive chairman of an investment unit.

The statement didn’t mention the new CIO’s family relations to the group chairman and HNA declined to comment beyond its public disclosures.

According to a bond prospectus document last year, the new CIO is in his mid-30s, has more than 11 years of management experience and an undergraduate degree in economics from the University of Massachusetts.

He also held various positions at HNA Group International Co, a unit formed in Hong Kong in 2010 to be the Chinese conglomerate’s offshore investment and foreign capital management arm, according to the document.

”It certainly seems that the chairman is trying to consolidate control over the group,” said Nigel Stevenson, an analyst in Hong Kong at GMT Research Ltd. — Bloomberg

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