The Chinese conglomerate the HNA Group, equal parts mysterious and acquisitive, has outlined its ownership structure in response to pressure from banks and U.S. lawmakers. But its "revelations" raise as many questions as they answer.
HNA, which is the parent of Hainan Airlines SH:600221 and a dozen other subsidiaries, has pumped $40 billion into overseas acquisitions over the course of the last three years. But it faces accusations that it is owned in part by powerful members of the Communist Party.
Its wheeler-dealing has seen it build billion-dollar stakes in Deutsche Bank (DB) , where its 9.9% holding means it is now the largest shareholder, and Hilton Hotels (HLT) , where its $6.5 billion investment gives it a 25% stake.
HNA is also buying SkyBridge Capital, the hedge fund of funds established by new White House communications director Anthony Scaramucci. The HNA sale would net Scaramucci up to $77 million, according to Forbes. But the deal has been delayed by the Committee on Foreign Investment in the United States, according to Bloomberg.
HNA said in a statement on Monday that a little-known businessman, Guan Jun, has donated his 29.5% stake in the company to the equally unheard-of nonprofit the Hainan Cihang Charity Foundation, which is registered in New York and was set up in December 2016.
Another charity, the Hainan Province Cihang Foundation, owns 22.75% of the HNA Group. That's more than co-founders Chen Feng and Wang Jian, who each own 14.98 stakes in the group, with fellow co-founders Chen Wenli holding 3.95% of shares and Tan Xiandong, 2.95%.
Guan is a 30-something Beijing businessman who reportedly lives in a rundown apartment complex in the Chinese capital. His role in the company's ownership was first mentioned in a regulatory filing when HNA took over Swiss air caterer Gategroup Holdings.
Quite how an unknown young man built up such a large stake in HNA, which Bloomberg calculates would be the world's 45th-biggest non-financial company if listed, is not known. HNA's filing did not explain anything about Guan's role, other than to say he is a private investor who has not held a position with the group.
Guan acquired his stake from the Hong Kong-based financier Bharat Bhise, who has advised the HNA Group on its deals. Bhise has denied requests for an interview with The New York Times on his role with HNA.
Co-founder Chen Feng insisted, in an interview in late June with the South China Morning Post, that Guan owned a "tiny stake in the company" but was not a significant shareholder. Claims made by a maverick Chinese businessman that Communist Party officials were behind the company's ownership and operations are a "pack of lies," Chen said.
China's Communist Party leaders believe in sharing everything except information about their own wealth. Many of the party's most powerful members have built up million-dollar fortunes over the course of their time in power, which do not tally with their modest official incomes.
Party bigwigs are desperate to disguise politically inconvenient and dubiously gained holdings. With a corruption crackdown under way in China, officials typically mask their wealth through "white-glove" holdings via third parties, or by putting them in the names of relatives.
The controversial billionaire Guo Wengui, who lives in exile in New York City, has said that Communist Party officials and their relatives are undisclosed shareholders in HNA. The extensive hidden holdings go as high as members of the Politburo Standing Committee of the Communist Party of China, the country's cabinet, Guo claims. The company sued him for defamation, saying these statements harmed its reputation.
HNA owns a listed subsidiary, HNA International Investments Holding HK:0521, a financial holding company that owns investments in golf courses, hotels, digital television and LED production. Hainan Airlines, China's fourth-largest domestic carrier by fleet size, is listed in Shanghai.
The airline started life in 1993 with four aircraft. Now a sprawling conglomerate based on the tropical island of Hainan, "China's Hawaii," HNA has been one of the most aggressive Chinese acquirers of overseas assets in recent years.
It was the biggest buyer of land for property development in Hong Kong last year, spending HK$27.2 billion ($3.5 billion) within four months on four high-priced lots at the redevelopment of Hong Kong's old airport, Kai Tak.
It has also spent $5 billion on electronics distributor Ingram Micro, $2.8 billion on cargo handler Swissport, $2.6 billion on the aircraft-leasing company Avolvon Holdings (AVOL) , and $1 billion on the Singaporean logistics company and commodities trader CWT Group.
Asking too many questions about HNA's backing raises hackles in China. Interpol, the international police unit, in April put out a "red notice" for Guo at the request of China's government.
Such a notice comes when a member nation has issued an arrest warrant or court order against someone. It is up to the host nation as to what action to take, which can include a provisional arrest on behalf of the nation that filed the "red notice" request.
Guo spends much of his time running his empire from a $68 million condo overlooking Central Park, making many of his most explosive comments by Twitter and YouTube. The United States does not have an extradition treaty with China and has yet to do anything about his presence in the country.
In its June defamation suit against Guo, HNA said the exiled billionaire made "baseless and meritless" claims about the company. The company also says that Guo has obtained confidential information about 146 clients of the HNA Group, including flight times, destinations and flight numbers, that he has used to spread "corruption" and "sexual" stories.
The summons cites allegations that "officials in China's Communist Party and their relatives are undisclosed shareholders" in the group, and that Hainan Airlines had let government officials and their relatives use its aircraft "for purely personal reasons."
Bank of America Merrill Lynch (BAC) has decided not to do business with the HNA Group, Bloomberg said last week. Citigroup (C) and Morgan Stanley (MS) are avoiding such deals. U.S. and European lawmakers also want more information about its ownership before granting regulatory approval for its acquisitions.