The Chinese billionaire, the head of the tourism and financial conglomerate HNA Chen Feng, was banned by a court from spending money on a beautiful life due to the company's debts. Writes about this The New York Times.
The injunction specifically applies to first-class flights, high-speed train travel, luxury hotels, and luxury resorts. Also, a businessman will not be able to buy real estate or make expensive repairs at his home. All expenses that are not necessary for life and work are prohibited. To spend large sums, the billionaire will have to obtain a special permit, writes the South China Morning Post.
The reason for the restrictions was the violation by HNA of the March court order issued following the results of the proceedings with one of the investors of the financial online platform Jubaohui (owned by the company). In 2018, a resident of China bought two investment products through the platform. вЂњWhen she did not receive what was due to her under the terms of the investment agreement, she sued the company,вЂќ writes The New York Times. By the decision of the judge, HNA was supposed to pay her debt with interest within 10 days but did not do this. As a result, by September 2020 the company owed 50 thousand dollars.
HNA has been going through hard times in recent years due to the consequences of its management's aggressive expansion policy. Over the years, HNA has been buying up expensive real estate and stakes in companies such as the Hilton hotel chain, Deutsche Bank, and the Virgin Australia airline, the American newspaper explains. However, HNA management made purchases with borrowed funds.
As a result, the company formed tens of billions of dollars in debt, began to sell off assets, and attracted the attention of the Chinese authorities. This has raised concerns among investors about HNA's ability to service its debt, causing its international borrowing costs to skyrocket. The situation got so bad that the company even tried to borrow funds from its own employees, but was not successful.
The 2020 crisis caused by the coronavirus pandemic has crippled HNA even more. The restrictions imposed to stop the spread of the disease have hit air travel. HNA also owns Hong Kong Airlines, China's third-largest airline.