Chen Feng, founder of China'
© Chen Feng, founder of China's Hainan Airlines and HNA Group Xiaomei Chen
Chen Feng, founder of China's Hainan Airlines and HNA Group
Two top executives of HNA Group have been detained by China's police, days after one of the country's largest private conglomerates was broken down into four separate businesses following its bankruptcy restructuring.

HNA's founder and former chairman Chen Feng, and the former chief executive Adam Tan Xiangdong have been detained by police on "suspected crimes," the group said in a statement in its official WeChat account.
"HNA Group and its member enterprises are operating in a stable and orderly manner. The [company's] bankruptcy restructuring is going smoothly and its production and operations have not been affected."
The detentions bring the curtains down on HNA, built on the foundations of China's most successful private carrier Hainan Airlines.

With a handful of aircraft, the carrier - with an early investment from the American financier George Soros - quickly built a business flying holiday makers and Russian tourists from China's frigid north to the country's sole tropical island, long regarded as "China's Hawaii" for its beaches, azure waters and holiday resorts.

Over three decades, HNA ballooned from a regional airline into one of China's largest private enterprises and most profligate asset buyers. Much of the growth, fueled by bank borrowings, took place after 2010 when Chen set the goal for HNA to make it among the Fortune 100 companies, ranked by assets.

At its peak, HNA's estimated US$50 billion of assets spanned the globe, from the largest stake in Deutsche Bank to a quarter of Hilton Hotels and Resorts, to a land parcels at Hong Kong's former Kai Tak airport.
land parcels
© SCMP Graphics
Land parcels acquired and sold by HNA Group at Kai Tak.
The asset shopping spree landed HNA with 500 billion yuan (US$77.3 billion) of debts, according to Gu Gang, executive chairman and the head of the working committee responsible for untangling the group's businesses.

After a meeting with 2,700 key officials of the group who took part in person or via video link, Gu said they must strengthen their cohesion and follow guidance from the Communist Party. He was quoted in a company statement saying:
"HNA's bankruptcy restructuring is at its last stages. Each business unit must review the hard lessons learned from its past 28 years of development. We must understand that it was the party and the nation that has given HNA the chance to be reborn, and follow the instructions of the party."
Chen was still listed on HNA's website as chairman and Tan as CEO on Friday evening. The company's statement did not specify the crimes committed by the two executives.
Adam Tan Xiangdong
© Bloomberg
Adam Tan Xiangdong, chief executive officer of HNA Group
Under HNA's restructuring, the group will be divided into four parts, with each unit operating independently in aviation, airport, financial and commercial, according to a restructuring blueprint unveiled over the weekend.

Hainan Airlines will receive a strategic investment from Liaoning Fangda Group Industrial, a conglomerate with business in the carbon, steel and pharmaceutical sectors.

HNA raised eyebrows in Hong Kong for overpaying for land in late 2016 and early 2017. Over four months, the company paid HK$27.2 billion (US$3.5 billion) for four plots at Kai Tak, breaking records along the way, to build waterfront luxury flats.

After falling into financial difficulties, it was forced to sell them all. It made a gain of HK$2.54 billion on the first three, but suffered a HK$740 million loss on the last plot.

HNA also owns Hongkong Airlines, which had to axe over 1,000 jobs, made steep pay cuts after the coronavirus pandemic hit the travel industry hard. It was also served a couple of lawsuits in April and May this year over alleged non-payments.

HNA Group was one of four Chinese conglomerates that were placed under scrutiny for their debt-fueled asset acquisitions, along with Anbang Group, CEFC Group and Dalian Wanda Group.

Anbang was nationalised in February 2018 and its former chairman Wu Xiaohui was sentenced to 18 years in jail for fraud and embezzlement. The insurance company, since renamed Dajia, is seeking investors to take it over from the government.