David Fickling is a Bloomberg Gadfly columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.

Does HNA Group Co. hope that the latest disclosures about its ownership structure will dispel the concerns of Western bankers? If so, the misadventures of Donald Trump Jr. provide a cautionary tale.

The U.S. president's son this month released copies of emails in which he was offered purported information damaging to Hillary Clinton as "part of Russia and its government's support" for his father's election campaign. He released the copies "in order to be totally transparent," he wrote on Twitter -- but if he hoped it would make questions about his meeting with a Russian lawyer go away, he was mistaken.

Transparency, after all, isn't just about releasing fragments of information that previously weren't disclosed. It's about providing a convincing narrative, and sufficient verifiable information to back up that account. Trump Jr.'s disclosures were treated with skepticism because of the way the information had to be dragged out of him after denials and misdirection, and because of unanswered questions left even by his fuller disclosure.

Rolling In the Deep
HNA Group has tens of billions of yuan in debts maturing over the coming years
Source: Bloomberg

HNA's problem is a straightforward one. With four of the Chinese banks that funded the company's growth stopping new loans or trimming their exposure amid a government crackdown on acquisitive dealmakers like HNA, a business model built on a mountain of debt is under threat.

HNA's businesses don't generate the sort of returns it needs to justify the prices it paid to buy them, and meanwhile its interest payments have outstripped operating income for three straight years. It needs a new patron, but major Wall Street institutions -- including Bank of America Corp., Citigroup Inc. and Morgan Stanley -- are steering clear because of difficulties getting approval from "know your customer" committees, people familiar with the matter told Bloomberg News last week.

Plus Ça Change
More than three-quarters of HNA Group's shareholder register has shifted ownership over the past 12 months
Source: Company statements, regulatory documents
Note: "Hainan Airlines" refers to Hainan Airlines Co. Ltd. Employees Union in May 2016, and Hainan Airlines Holding Co. Ltd. in July 2017.

The disclosure late Monday that New York-based Hainan Cihang Charity Foundation Inc. owns 29.5 percent of the group doesn't really help clear this up. Nor does the announcement that Guan Jun, a businessman about whom little is known who at one point owned 29 percent of the 412 billion yuan ($61 billion) company,  has donated his shares to Cihang.

As with Donald Trump Jr., these shards of information prompt more questions than they answer. Taking Guan off the shareholder register doesn't solve the mystery of who he is, or dispel worries that the register as a whole contains bai shoutao -- so called "white glove" investors who hold shares on behalf of undisclosed beneficial owners.

New Kid on the Block
HNA's U.S. non-profit has emerged from nowhere to become one of the biggest U.S. charitable foundations by total assets
Source: Foundation Center, Company statements, Bloomberg
Note: Hainan Cihang Charity Foundation figure based on value of 29% stake in HNA Group's 412 billion yuan equity value as of Dec. 31, 2016.

While the Chinese-based Hainan Province Cihang Foundation has been known about for years, the New York-based Hainan Cihang Charity Foundation Inc. that is now named as HNA's biggest shareholder has emerged from nowhere. Based on HNA's book value in its latest published accounts, Cihang's total assets must now be little short of $18 billion, making it the largest U.S. charitable foundation after the Bill & Melinda Gates Foundation on that measure. According to its own filings, as recently as Dec. 31 last year, it had not a cent to its name.

HNA's stated commitment to transparency and its promise Monday to disclose an updated ownership structure on an annual basis should be welcomed. It would be a step forward both for its foreign lenders, and more importantly for the company's self-interest.

After all, until questions about ownership, control and sources of funds can be convincingly answered, HNA will face continuing skepticism. Given its dependence on the trust of bankers to keep the show on the road, that's a worrying place to be.

-- Shelly Banjo contributed to this column.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

  1. Based on net asset value.

To contact the author of this story:
David Fickling in Sydney at

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Paul Sillitoe at