Human Rights Center Asks US Congress To Probe HNA Group

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HONG KONG — A group of U.S.-based Chinese activists wrote an open letter on Tuesday to the U.S. Congress and the administration, urging it to probe HNA Group over concerns that the largest shareholder of the well-connected Chinese company — a charity known in New York as “Cihang” — might be a vehicle for “a grand embezzlement of public wealth.”

“We are writing this open letter to express our deepest concerns about the highly suspicious activities of the HNA Group (HNA) in the United States, including the lack of transparency of its ownership, the unclear nature of its plan for charity work, and allegations of large-scale corruption,” said the China Human Rights Accountability Center in the letter dated August 15 and published on the ChinaChange website.

Established in January, the Center was founded by ten mostly U.S.-based Chinese human rights activists. Members include Bob Fu, head of non-government organization China Aid, blind activist Chen Guangcheng and human rights lawyer Teng Biao.

Survivors of the 1989 Tiananmen Square crackdown Zhou Fengsuo, Yang Jianli and Fang Zheng also belong to the Center, along with Beijing dissident Hu Jia.

The Center said it works mostly in the San Francisco Bay Area and Washington D.C.

“We strongly urge Congress and relevant administrative agencies to investigate and uncover the true nature of the HNA Group, its asset sources, and intended uses in the United States,” said the Center in a statement, adding that the initiative is warranted by the Global Magnitsky Human Rights Accountability Act.

Passed initially in 2012 and extended to cover the globe in Dec. 2016, the Magnitsky Act empowers the U.S. president to impose sanctions on foreign officials responsible for violations of internationally recognized human rights.

The Center said in a Jan. 10 statement that it intends to “use this new U.S. law, as well as similar laws that have been and will be passed in other countries, as a tool to bring sanctions against Chinese human rights violators and corrupt officials.”

Suspect connections

Citing existing media reports, including those of the Nikkei Asian Review, the Center said the company took off only after 2002 when Wang Qishan, now a Politburo Standing Committee member leading president Xi Jinping’s anti-graft campaign, became the party chief of Hainan Province, where HNA is based.

HNA Group chairman Chen Feng previously worked under Wang for a project called China Agriculture Trust Investments in the 1980s.

The Center suggested that such connections are linked to a 29.5% stake held under the mysterious Guan Jun, formerly the largest shareholder, but absent from the company’s latest shareholding structure unveiled in July.

The revelation came only after Bank of America Merrill Lynch declined to deal with the company due to “Know Your Customer” complications.

“We suspect that HNA’s largest shareholder Guan Jun may have acquired his 29.5% share ownership by siphoning public assets through government manipulated privatizations, because public records provide no evidence that he purchased these shares fairly,” said the Center.

Guan has reportedly donated his 29% interest in HNA Group, worth of $18 billion, to Hainan Cihang Charity Foundation, a private foundation based in New York.

The donation made it one of the largest private foundations, second only to the Bill Gates Foundation, according to the Center.

Registered last December, the offshore entity is now applying for federal tax-exempt status in the U.S., which has yet to sign the Organisation for Economic Co-operation and Development’s common reporting standard for the automatic exchange of tax and financial information worldwide.

Including the onshore sister foundation created in 2010, Cihang owned 53% of HNA Group.

“HNA remains behind a heavy veil, despite its incomprehensible success,” said the Center, noting there is no other possible explanations for the group being able to obtain a seemingly unlimited line of credit from all major state-owned financial institutions in China.

“HNA bypassed scrutiny while acting as a state sovereign investment company. On the other hand, given the opacity of the ownership and its special connections, we are concerned that it could very well be controlled by individuals and families connected with the top of the Chinese Communist Party (CCP), operating through a shadowy Guan Jun,” it said.

“Cihang will provide a shelter for CCP leaders’ families to retain their wealth, which they could only have obtained through corruption,” it added. “Cihang may thus become a beachhead for the CCP to influence the U.S. government and public.”

Pending an official response, a representative of the company in Hong Kong did not immediately address questions related to the Center’s allegations when reached by the Nikkei Asian Review on Wednesday.

Source: NAR

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