The Chinese organization HNA says the chief executive and the chair have been arrested by police

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Chinese police have arrested the remaining two co-founders of HNA in the latest twist in the fall of China’s most-acquired group.

Chairman Chen Feng and chief executive Adam Tan were taken into custody on Friday on suspicion of suspected crimes without giving details of the alleged crime, according to the state-controlled Bankruptcy Chinese Association.

The arrests return to the spotlight in one of China’s most turbulent corporate stories. The move by Chinese officials comes three years after co-founder Wang Jian died in Benueux, in southern France, in what French police say was an accident.

The mysterious trio amassed a 90 billion acquisition that increased the group’s wealth by about b 20 billion in just two years in the mid-2010s.

What started out as an airline became a travel industry-centric organization owned by the Hilton Hotel Chain, the Dutch transport group TIP Trailer Service, and the Irish aircraft’s Laser Avalon. It boasts market properties such as Deutsche Bank’s largest single share, New York’s 255 Park Avenue and US computer chip maker Ingram Micro.

But the acquisitions were highly leveraged – taking orrowing against its Chinese asset base – raising concerns if the domino effect returns to the country, if the group suddenly fails to repay its tsunami, or reschedules.

In late January, Chinese creditors began the process of bankruptcy, and a few days later, HNA subsidiaries reported that billions of dollars in funds had been misused.

Prior to their arrest on Friday, the former high-flying executives had disappeared from public view for the past few years. Chen was prevented from taking flights and high-speed rail. Tan’s name was last revealed in a company statement in September 2018.

State bankers and regulators have set up camp at the company’s office on China’s southeastern coastal island of Hainan for several years, trying to clear up the mess.

The group’s executive chair, Gu Gang, said on September 1 that the debt restructuring talks had “entered a decisive final stage”. The proposed restructuring plan will divide the broad group into four entities, with new shareholders taking control of the aviation, airports, financial and commercial sectors.

“Experience tells us that blind diversity is rarely good,” said Gu, who is leading the executive committee responsible for opening HNA’s estimated b b billion.

Even before Wang’s mysterious death, the group came under intense pressure from regulators in China and abroad over the company’s opaque rule and ultimate ownership and over.

This group is one of the so-called “gray rhinos” in China because they are seen as a threat but not acted upon. They have been compared to Evergrande, China’s troubled property developers whose debt problems have shaken global markets in recent weeks.

Experts say HNA’s experiences may have served as a clear warning about the future of the relationship between the leadership of the authoritarian Chinese Communist Party and the entrepreneurial and business leaders who rely on the country’s economic growth.

Gu said on September 18 that the reorganized group should “carry forward the excellent culture of HNA and abandon the bad culture”.

Additional report by Sherry Fei Xu in Beijing

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