BEIJING — The authorities in China have taken into custody the highest two executives of a conglomerate that purchased up companies all over the world earlier than rapidly collapsing below heavy money owed, the newest transfer to self-discipline the nation’s company leaders.
The conglomerate, a transportation and logistics firm known as HNA Group, stated late on Friday that the police on Hainan Island, the place it’s based mostly, had seized its chairman, Chen Feng, and chief government, Tan Xiangdong.
Each males have been detained “in accordance with the legislation for suspected crimes,” the corporate stated in a press release, with out specifying these offenses. HNA didn’t instantly reply to requests for remark.
The detention of the 2 males comes as world traders await the destiny of one other troubled Chinese language company big, China Evergrande Group. The corporate, which is struggling below greater than $300 billion in debt, is extensively seen as liable to defaulting on its obligations. It isn’t clear but whether it made a payment on $83 million in overseas debt that was due on Thursday.
The issues of Chinese language corporations with huge ambitions however wasteful borrowing practices have come below a highlight in Beijing. Chinese language leaders more and more see such debt-fueled company exercise as counterproductive and have moved to tame these practices.
HNA grew to become an emblem of the mercurial rise and profligate spending of China’s first wave of personal conglomerates with sturdy political backing. It acquired massive stakes in Hilton Lodges, Deutsche Financial institution, Virgin Australia and different companies, and at its top employed 400,000 individuals all over the world.
HNA struck 123 deals in three years, solely to start working into bother in 2017 in repaying the debt incurred to pay for its acquisitions.
Mr. Chen’s co-chairman, Wang Jian, died in 2018 when he fell off a wall whereas sightseeing throughout a enterprise journey to France. The loss of life was dominated an accident.
HNA, Evergrande and different massive, non-public Chinese language corporations that grew rapidly solely to face monetary collapse within the final a number of years are sometimes referred to in China as grey rhinos. The time period refers to apparent risks which might be ignored till they immediately develop into very harmful, and had been taken up by Chinese language officers.
Cao Li contributed analysis.