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HNA's NYC-Based Charity Registers With N.Y. Attorney General

Updated on
  • Nonprofit hasn’t decided whether to seek tax-exempt status
  • Chinese company has made $40 billion of foreign acquisitions

HNA Group Co., the Chinese conglomerate that’s been buying stakes in banks and hotels, registered its U.S. nonprofit with the New York attorney general two months after revealing that the charity and an affiliate in China own 52 percent of the company.

The filing comes as HNA is under a national-security review as it seeks to buy a U.S. hedge fund firm and major banks seek more information about the company’s ownership structure. HNA has made more than $40 billion of foreign acquisitions since the beginning of 2016, buying a stake in Deutsche Bank AG and snapping up 25 percent of Hilton Worldwide Holdings Inc.

New York Attorney General Eric Schneiderman, whose office oversees charities in the state, advised HNA in July to register with his office’s charity bureau after the conglomerate disclosed its partial ownership by the nonprofit. In an August letter to Schneiderman, HNA said it didn’t need to register the charity as a fundraising organization under New York’s Executive Law because the entity won’t be soliciting funds.

The organization, called Hainan Cihang Charity Foundation Inc., said in the filing Friday that it hasn’t decided whether to seek federal tax-exempt status. The charity "is still in the early stages of its organization and operations and looks forward to sharing more about its activities and ambitions in time," the foundation said in an emailed statement.

The foundation said that the HNA shares it owns have been transferred to the New York charity, but couldn’t set a value on them. The organization’s filing also noted that its bylaws prohibit the charity from political activities.

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Adam Tan, HNA Group’s chief executive officer, and Chen Guoqing, director of GC Tankers, a small transportation and logistics company owned by the company, are listed as directors of the Manhattan-based nonprofit, according to a filing. Chen is also the brother of HNA Group Chairman Chen Feng.

The New York foundation’s other director is listed as HNA Capital International CEO Guang Yang. The nonprofit’s deputy secretary is Daniel Chen, president of HNA North America LLC, while Ching-Ting Jian, a senior accountant at HNA Capital International, is the treasurer, according to the filing.

The charity, located on Park Avenue, registered with New York’s Secretary of State in December and got its first $5 million donation from company sources in March. It will only hold funds in the state and won’t solicit them, HNA said. HNA has already made financial commitments to Harvard University, the Massachusetts Institute of Technology and a New York area hospital, a spokesman for the charity said.

HNA is poised to buy the hedge fund firm SkyBridge Capital from Anthony Scaramucci, who was ousted July 31 as President Donald Trump’s White House communications director after a tumultuous 10-day tenure. The deal has been delayed by the Committee on Foreign Investment in the U.S., which vets sales of American assets to foreign buyers to protect national security.

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HNA founded in 1993 as a regional airline operator, with George Soros as an early investor. The company says it’s created 410,000 jobs worldwide and has assets of about $150 billion.

HNA’s ownership structure has raised concerns among banks. Bank of America Merrill Lynch has told investment bankers to stop working on transactions with HNA for now amid growing concerns about the group’s debt levels and ownership structure, people familiar with the matter told Bloomberg News.

(Updates with share transfer. A previous version of this article was corrected for the foundation’s name.)
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