A Chinese Billionaire Is Barred From Spending Over Unpaid Debts

A Chinese Billionaire Is Barred From Spending Over Unpaid Debts

No first-class flights. No holidays. No high-speed rail tickets or lavish weekends on the golf course.

A Chinese court docket this week barred Chen Feng, the chairman and co-founder of the Chinese conglomerate HNA Group, from making massive purchases after the corporate did not pay cash it owed in two authorized settlements, a humbling flip of occasions for what was once one of the country’s biggest and most acquisitive business empires.

China has for years used spending restrictions as a method to implement money owed and discourage irresponsible borrowing. It has even made details about defaulters publicly searchable online, as a form of blacklist of those that are prohibited from forking out on journey, actual property and costly personal faculties for his or her kids.

An HNA consultant didn’t reply to a request for remark.

Mr. Chen, who’s in his mid-60s, helped rework a Chinese regional airline primarily based on the island province of Hainan into a world company behemoth. HNA took stakes in companies together with Hilton Hotels, Deutsche Bank and Virgin Australia. It purchased up trophy properties and golf programs. Mr. Chen and his brother every bought a whole ground at One57, an ultra-luxurious Manhattan residential tower.

But the debt the corporate took on to make these purchases grew so massive that it drew the eye of the Chinese authorities. In current years, HNA has unloaded billions of {dollars} of holdings. Investors dumped its bonds. It even asked its own employees to lend it cash, although firm representatives have stated that solely small quantities have been raised this fashion.

The two lawsuits that led to the restrictions on Mr. Chen’s expenditure have been introduced towards HNA by Chai Jing, 50, a resident of the Chinese metropolis of Xi’an.

In 2018, Ms. Chai had bought two funding merchandise from Jubaohui, a web based monetary platform owned by HNA. When she didn’t obtain what she was owed below the phrases of the funding settlement, she sued. In March, a district court docket in Xi’an ordered HNA to pay her roughly $50,000 in principal, plus curiosity. The court docket stated this week that the corporate had failed to take action.

Not way back, HNA had $145 billion in assets and $90 billion in annual revenue, most of it from firms acquired exterior China. Even after the struggles of current years, the Hurun Report, a analysis group in Shanghai that tracks the rich in China, estimated Mr. Chen’s wealth in 2019 to be $1.9 billion.

HNA and its aviation enterprise had been below monetary strain even earlier than the coronavirus pandemic slammed your complete international journey trade this yr. In February, the corporate stated it had begun working with the Hainan government on a restructuring with its creditors.

John Show

About John Show

John is a journalist with nearly 6 years of experience. While studying journalism at the University of Tennessee, John found a passion for finding engaging stories. As a contributor to Market News Reports, John mostly covers state and national developments.

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