Police detain Chairman and CEO of HNA Group, parent of Hainan Airlines

Police have detained Chen Feng, Founder and Chairman, and Tan Xiangdong, CEO, of HNA Group, one of China's largest private conglomerates and parent company of Hainan Airlines. They have been detained in Hainan province, suspected of involvement in non-specified crimes. “The HNA Group and its member companies are operating stably and orderly. The group's bankruptcy restructuring is going smoothly and its production and operation have not been affected,” HNA Group said in a statement. Creditors of the group applied to the court for bankruptcy and restructuring early this year after HNA failed to pay due debts. Under HNA's restructuring plan, the group will be divided into four parts, with each unit operating independently in aviation, airport, financial and commercial services.

Gu Gang, Communist Party Secretary of the group and head of the working committee responsible for its restructuring, said in a letter to all HNA employees that the “group has driven to the final section of a dark tunnel and is about to move back on track soon. Everyone must stick to their posts, spare no effort and strive together for the final battle of the restructuring,” Gu said in the letter after the detention of the group's two top executives. “Some people have lost their original aspiration and assumed they could get through crises repeatedly,” Gu said. He noted “ambition and desire” sent the group into the abyss, shattered the hopes of more than 100,000 families and causing hundreds of billions yuan in losses to the country. The group has not specified what crimes the two executives have committed. The group is based on Hainan Airlines, a private regional carrier on Hainan Island, which later grew up to be one of the nation's four large carriers along with Air China, China Eastern and China Southern.

Since the airline began operating in 1993, revenue of the group soared to CNY127.7 billion within two decades from CNY117 million. The group owned 19 airplanes, which transported some 45 million passengers annually by 2012. The fleet of the carrier increased to 427 in 2012 from only three when the airline was founded. It also owned 28 overseas companies, with total assets of CNY75.2 billion. The group accelerated its rapid expansion from 2013 by purchasing overseas companies, airlines and lands, mostly fueled by bank borrowings. HNA also owns 25% of Hilton Worldwide.

In its heydays, the total assets of the HNA Group reached CNY1.2 trillion in 2017, making it one of the biggest conglomerates in China and a multinational enterprise covering aviation, real estate, tourism, assets and logistics. The group began being hit by a series of crises in 2017. Wang Jian, former Chairman and Co-founder of HNA died in an accident in 2018 after falling down a hill in France, the Shanghai Daily reports.