A Chinese Billionaire Is Barred From Spending Over Unpaid Debts

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 large purchases after the corporate did not pay cash it owed in two authorized settlements, a humbling flip of occasions for what was as soon as one of many nation’s largest and most acquisitive enterprise empires.China has for years used spending restrictions as a approach to implement money owed and discourage irresponsible borrowing. It has even made details about defaulters publicly searchable on-line, as a kind of blacklist of those that are prohibited from forking out on journey, actual property and costly personal faculties for his or her kids.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 based mostly on the island province of Hainan into a world company behemoth. HNA took stakes in corporations together with Hilton Resorts, Deutsche Financial institution and Virgin Australia. It purchased up trophy properties and golf programs. Mr. Chen and his brother every bought a complete flooring 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 of holdings. Traders dumped its bonds. It even requested its personal staff to lend it cash, although firm representatives have stated 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, a web based 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 stated this week that the corporate had failed to take action.Not way back, HNA had $145 billion in property and $90 billion in annual income, most of it from corporations acquired outdoors China. Even after the struggles of current 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 entire international journey trade this yr. In February, the corporate stated it had begun working with the Hainan authorities on a restructuring with its collectors.

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