Qianhai exchange exits retail financial products business

Qianhai Air & Shipping Exchange, part of China’s debt-laden conglomerate HNA Group, said it would exit the retail financial products business from Monday to comply with a government order and a changing business focus for the group.

The exchange helps airlines and shipping projects obtain financing by finding investors for their wealth management products that, according to its website, offer “safe and reasonable returns.”

It said in a statement on Monday that corporate borrowers have been informed to repay their debt to the retail investors.

HNA Group will supervise the fund repayments for retail investors and guarantee all investment funds, it said. It did not disclose the outstanding amount.

However, HNA employees who invested in wealth management products sold through the exchange will have to wait for at least 24 months to get their money back in full, according to an exit plan reviewed by Reuters and verified by an HNA employee.

The repayments to the HNA employees will come in the form of semi-annual installments with an annualized interest rate of 10 percent, according to the plan. The first payback will be on February 28 next year.

A spokeswoman for HNA refused to comment on the case.

The Qianhai exchange was founded by HNA Group in 2014 with approval from the city government of Shenzhen. It has 1.37 million retail users and 1,243 institutional users.

The cumulative transaction volume on the exchange has exceeded 160 billion yuan ($23.41 billion), according to its website.

Its partners include China’s largest banks led by Industrial and Commercial Bank of China Ltd and Bank of China.

In Monday’s statement, Qianhai exchange said it will focus on airline asset trading and fintech in the future.