Sunday, September 20, 2020

A Chinese language Billionaire Is Barred From Spending Over Unpaid Money owed

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

A Chinese language court docket this week barred Chen Feng, the chairman and co-founder of the Chinese language 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 solution 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 youngsters.

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

Mr. Chen, who’s in his mid-60s, helped remodel a Chinese language regional airline primarily based on the island province of Hainan into a worldwide company behemoth. HNA took stakes in companies together with Hilton Motels, Deutsche Financial institution 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.

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

The 2 lawsuits that led to the restrictions on Mr. Chen’s expenditure had been introduced in opposition to HNA by Chai Jing, 50, a resident of the Chinese language metropolis of Xi’an.

In 2018, Ms. Chai had bought two funding merchandise from Jubaohui, an internet monetary platform owned by HNA. When she didn’t obtain what she was owed beneath 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 mentioned 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 corporations acquired exterior China. Even after the struggles of latest 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 beneath monetary stress even earlier than the coronavirus pandemic slammed your complete world journey business this 12 months. In February, the corporate mentioned it had begun working with the Hainan government on a restructuring with its creditors.

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