BEIJING (Reuters) – Late HNA Group Co Ltd co-chairman Wang Jian’s 14.98 percent stake in the conglomerate will be donated to a China-based charity foundation that is already among its top shareholders, said a person with direct knowledge of the matter.
The decision was announced on Friday by Chief Executive Adam Tan at Wang’s memorial service held in Haikou, the capital city of the southernmost Hainan province, the person said, declining to be identified as the matter was not public.
Wang ran day-to-day operations and is widely regarded as the architect of HNA’s $50 billion acquisition spree that pushed the conglomerate into debt. He died in France on July 3 from what local police said appeared to be an accidental fall from a wall while posing for a photograph.
His sudden death has raised concerns about any potential directional change in company strategy and leadership amid the conglomerate’s efforts to slash its massive debt burden.
HNA’s aggressive deal-making in the past two years sparked intense scrutiny of its ownership and use of leverage. Wang’s accidental death complicates the situation and could increase pressure on HNA to reveal more about its often-criticized opaque ownership, people in the industry said.
The aviation-to-financial services conglomerate, whose holdings include a stake in Deutsche Bank AG (DBKGn.DE), has agreed to sell more than $16 billion worth of overseas assets this year, according to Reuters calculations and media reports.
HNA is controlled by a New York-based foundation and a China-based charity, dubbed Hainan Province Cihang Charity Foundation, that together hold 52 percent of HNA shares.
The China-based charity which will take on Wang’s stake already controls 22.75 percent of the conglomerate.
Shareholders have promised that in the event of leaving the company or dying they would pass their stakes to the New York charity fund, according to a document seen by Reuters. It was not immediately clear how binding those promises were.
In a written statement to Reuters, HNA said Wang made a written commitment on Dec. 18, 2015 to donate his 14.98 percent stake in HNA after his death to the charity.
The group will “assist the handling of all equity donations in accordance with the requirements of relevant laws and regulations, and in full accordance with the wishes of Chairman Wang Jian,” it said.
Chinese financial magazine Caixin reported the donation earlier on Friday, citing an unidentified source.
Reporting by Se Young Lee, Julie Zhu and Shu Zhang; Editing by Muralikumar Anantharaman