China Arrests Top Executives at a Debt-Loaded Company


BEIJING — Authorities in China have detained two of the top executives of a conglomerate that buys businesses around the world before they quickly collapse under heavy debt in the latest move to discipline the country’s corporate leaders.

The holding, a shipping and logistics company called HNA Group, said late Friday that police on Hainan Island, where it is located, had captured its chairman, Chen Feng, and its CEO, Tan Xiangdong.

In the statement made by the company, it was stated that both people were detained in accordance with the law on suspicion of crime. HNA did not immediately respond to requests for comment.

The arrest of the two men comes as global investors await the fate of another troubled Chinese corporate giant, the China Evergrande Group. Struggling with more than $300 billion in debt, the company is widely viewed as at risk of default. not clear yet whether you pay On the $83 million foreign debt due Thursday.

The problems of Chinese companies with big ambitions but wasteful borrowing practices were scrutinized in Beijing. Chinese leaders increasingly view such debt-driven corporate activities as unproductive and are taking action to tame these practices.

Became the symbol of HNA mercury rise and wasteful spending China’s first wave of private holdings with strong political support. It has acquired large stakes in Hilton Hotels, Deutsche Bank, Virgin Australia and other businesses and employed 400,000 people worldwide at its peak.

HNA shot 123 deals in three years, only to start having problems repaying the debt incurred to pay for their purchase in 2017.

Mr. Chen’s co-chairman, Wang Jian, died in 2018 When he fell off the wall while traveling on a business trip to France. The death was determined to be an accident.

HNA, Evergrande and other large, private Chinese companies that have grown rapidly to face only financial collapse in the past few years are often referred to as gray rhinos in China. The term refers to obvious dangers that were ignored and dealt with by the Chinese authorities until they suddenly became very dangerous.

Cao Li contributed to research.



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