Founder of Chinese Conglomerate HNA Sentenced to Prison
The founder of Chinese conglomerate HNA — once Deutsche Bank’s largest shareholder – has been sentenced to prison over fraud and other charges.
HNA Group founder Chen Feng has been sentenced to 12 years in prison and is subject to a 221 million yuan ($31 million) penalty, according to an «SCMP» report citing a court document, for harming the interests of a listed company, fraudulently obtaining loans and a breach of duty through misappropriation. 40 million yuan in personal assets were also ordered to be confiscated.
Two other senior executives were also sentenced to prison and fined.
Acquisition Spree
Hainan Airlines was founded by Chen in 1989 and it grew into a major conglomerate with businesses spanning beyond aviation to real estate, financial services, tourism, logistics and more following an acquisition spree in the mid-2010s. It bought stakes globally and was once the largest shareholder of Deutsche Bank.
But in 2021, it declared bankruptcy after struggling to pay off debts totalling more than $100 billion at one point, some of which was used to finance acquisitions. Several months later, Chen was arrested for suspected crimes.
The scrutiny of HNA was part of broader efforts by Chinese financial regulators to crack down on debt-based acquisitions beginning in 2017.
