(Yicai Global) June 16 -- The formation process of HNA Group Co's shareholding structure is in compliance with laws and regulations and there are no Chinese officials or their relatives involved in it, said HNA Group in a detailed response to Yicai Global's inquiry today. However, HNA Group shareholders will continue to donate equity to a non-profit fund, the company added.
The question of who owns HNA has been hotly debated in the media recently. The HNA Group has a complex shareholding structure, with some government officials and stakeholders allegedly holding HNA shares, claimed some media reports. Further speculation suggested an invisible figure named "Guan Jun" is the company's largest shareholder. However, the HNA Group responded that no Chinese officials or their relatives are holding shares. "Guan Jun" is a private investor indirectly holding HNA Group's shares, but he is not the largest shareholder, it clarified.
Through investigation of publicly available information, Yicai Global reporters found that Hainan Traffic Administration Holding Co. currently holds 70 percent stake in HNA Group and is the controlling shareholder of the company. Hainan Province Cihang Foundation owns 65 percent stake of Shengtang Development (YANGPU) Ltd. that holds 50 percent of equity of Hainan Traffic Administration Holding Co., and thereby indirectly controls 22.75 percent of stake in HNA Group.
HNA Group said that at present, HNA Group's single largest shareholder is Hainan Province Cihang Foundation. However, the "single biggest shareholder," according to experts, is a calculation of indirectly held shares after penetrating several layers of equity since Cihang Foundation does not directly hold a stake in HNA Group, but holds equity in the actual controller of HNA Group.
Cihang Foundation is a local non-profit fund launched by HNA Group. As a non-profit public welfare organization, the foundation's assets will be mainly used for disaster relief, poverty relief, charitable assistance, public welfare and other public welfare activities. The business authority organ of Cihang Foundation is the Civil Affairs Department of Hainan Province.
Cihang Foundation became the actual controller of HNA group through donation. In April 2013, chairman of HNA Group, Chen Feng, announced a CNY3 billion (USD440 million) worth of equity donation to Cihang Foundation at a charity event. The move was the first set of share donation made by HNA Group.
An HNA official told Yicai Global today HNA's shareholders will continue donations and about 60 percent of the company shares would go to Chihang Foundation, and the remaining 40 percent goes to Chihang Foundation's overseas arm, an HNA official told Yicai Global today.
"This move aims to secure the consistency of Chihang Foundation, especially when senior managers of HNA resign or pass away. They would donate the shares they received from stock incentive plan," the company official added.
Boeing 787 Dreamliner Jet Business
Some publicly-stated opinion suggests HNA Group's Boeing 787 Dreamliner business jet is for exclusive use of HNA's senior management and high-end customers. In other words, this expensive airliner is a minority exclusive resource. According to public reports, the above-mentioned Boeing 787 business jet, officially joined Golden Deer Business Aviation, HNA Group's subsidiary company in Hong Kong, last September.
Zhang Peng, chairman of Golden Deer Business, said the Golden Deer business jet had served former U.N. Secretary-General Ban Ki-moon, financial investor Soros, president of General Motors and other political leaders, and also served the royal family of Saudi Arabia, the United Arab Emirates and Brunei. The 787 Dreamliner business jet is positioned to meet similar high-end travel needs.
Last month, HNA announced its plan to introduce a second 787 jet as the "dream business jet." It made the statement together with Boeing in Seattle, the US. The company said the first 787 business jet received active market responses, which is why, it said, it plans to buy another one.
For the service provided by the first Boeing 787 Dreamliner, HNA Group said that the jet provides services to all customers fairly, and when customer pays fees to purchase charter services, HNA will do its best to provide them with high quality service experience.