Co-founder of Chinese giant HNA dies in France
Wang Jian was a former civil aviation official and one of China’s richest men
The co-chairman and co-founder of HNA Group, a Chinese conglomerate that spent heavily in recent years to build a global profile but that has since grappled with high debt, died from an accidental fall in France, the company said Wednesday.
The death of Wang Jian, a former civil aviation official who became one of China’s richest men, comes as the company has been trying to tame its debt of more than $90 billion (U.S.). It could also cast further doubt on HNA’s murky owner- ship, which has prompted some Wall Street banks to stop doing business with it. Wang owned a15-per-cent stake of the company. Wang, 57, was on a business trip to France, but had taken a detour Tuesday to go sightseeing when the fall happened, according to HNA and the French police. The police said they were treating his death as an accident.
Wang was visiting Bonnieux, a village with a church atop a rocky outcrop in the southern French region of Provence, when the fall occurred Tuesday morning.
“He wanted to have his picture taken by someone in his group,” Col. Hubert Mériaux, of the Gendarmerie force that helps police the area, said by telephone. As he climbed onto a low wall with a view of the local landscape, “he fell backward, 10 to 15 metres,” Mériaux said.
Mériaux said that the death was being investigated but that police had no immediate suspicions of foul play. Wang was with HNA employees at the time of his death, said Israel Hernandez, a spokesperson for HNA who had accompanied Wang on his trip to France
Chen Feng, HNA’s other cochair; Adam Tan, its chief executive; and Wang’s family were en route to France on Wednesday. The Chinese website of Hainan Airlines, one of HNA’s main businesses, had a grey display instead of its usual reddish colour scheme, in honour of Wang.
Wang’s death is a blow to the company at a time when it is trying to get a handle on its finances.
HNA spent tens of billions of dollars in recent years buying up financial firms, hotels, real estate and other investments around the world. It also bought Ingram Micro, a U.S. technology distributor, two years ago for $6 billion, and it took big stakes in major companies like Hilton Hotels and Deutsche Bank.
Wang played a key role in the company’s rise from a regional, state-controlled company to a vast conglomerate, and he helped mastermind its overseas deal-making. His brother, Wang Wei, also played a major role, although much of it was behind the scenes.
But HNA’s spending spree left it $90 billion in debt at a diffi- cult time. Last year, officials in Beijing began to cast a skeptical eye on Chinese companies that were buying billions in global assets with marquee names but little strategic value. In China, HNA was commonly lumped in with companies that the official news media called grey rhinos — large and visible problems that nevertheless go unnoticed until they begin moving too fast to stop.
After a lightening-quick rise in both size and influence, HNA is now shedding properties and interests in foreign companies at an even faster clip. Since the start of this year, HNA has announced deals to sell billions of dollars in assets. It has been shopping around some of the dozens of properties that it scooped up in recent years, according to two people with direct knowledge of HNA’s deals. It has sold its stake in Hilton Worldwide Holdings and is selling down its position in Deut- sche Bank, the German banking giant in which HNA once had the biggest single stake.
Even as it sheds some of its liabilities, it continues to show signs of financial strain. Just this week, an Australian company said the proposed sale of its refrigerated logistics business to HNA had fallen through, in part because of the Chinese company’s cash problems.
This year, HNA’s attempts to buy the hedge fund business of Anthony Scaramucci, a former White House communications director, were thwarted after close scrutiny by the Committee on Foreign Investment in the United States, an intergovernmental panel that reviews overseas acquisitions of U.S. companies. HNA is also facing pressure at home in China. Seven publicly listed companies owned by HNA have had their shares suspended for months, pending what the parent group said was a restructuring. HNA then said the companies would resume trading after an announcement June 9. But the group has yet to outline any major changes to its business, and the shares are still suspended.
HNA has also contended with questions over who controls the company. Last year, it said its largest shareholder, a mysterious businessman named Guan Jun, had transferred his stake to a charitable trust. Amid the confusion about HNA’s shareholder structure and ownership, Wall Street banks including Bank of America Merrill Lynch and Goldman Sachs decided to suspend any business with HNA
When asked about Wang’s 15per-cent stake in HNA, the company’s spokesperson said only that Chen, HNA’s cofounder and chair, and Tan, its chief executive, were “committed to the orderly continuity of the company’s business.”