From a Buddha-shaped building on the tourist island of Hainan, HNA Group has transformed itself into one of China’s most aggressive dealmakers — and drawn new scrutiny of its ownership and financing.
Founded as a provincial airline by economic reformers who drew on World Bank support, the parent of Hainan Airlines has grown into a sprawling, privately held international conglomerate. To fuel its growth, it has skilfully leveraged existing assets to fund the purchase of new ones — a process known in Chinese as “a snake swallowing an elephant”.
But the company’s $40bn deal spree — most recently it became Deutsche Bank’s largest shareholder by building up to a 9.9 per cent stake — has brought it criticism on several fronts. HNA recently became caught in the crossfire of a political storm involving Wang Qishan, China’s anti-corruption tsar and one of its most powerful politicians. Its heavy use of debt has also drawn concern from Standard & Poor’s and some overseas bankers