A year and a half ago, former Microsoft executive Scott Oki sold his Puget Sound-area golf course empire to a Chinese conglomerate for nearly $140 million.
But three outside business consultants say the deal had a hidden, unsavory back-story: They say they arranged the sale, only to be cut out late in the process, stiffing them out of millions of dollars in fees and commissions.
The allegations shed light on how the Chinese company that bought the golf courses — HNA Holdings, the parent company of Hainan Airlines — quickly grew into an international powerhouse with a variety of U.S. holdings, even as it reportedly blurred the lines between personal and corporate ownership.
Dan Conway and O’Brien McGarey, two golf course consultants based in Denver, said in an interview that they had been working since 2014 to find golf courses in Seattle or Los Angeles for a Chinese company called West Coast Golf Club.
Eventually, after conducting scouting missions with their buyer’s Seattle-based son-in-law, they identified their ideal target: Oki Golf’s 10 golf courses that span eight properties from Mukilteo to Olympia. Those include two high-end courses at The Golf Club at Newcastle; Washington National Golf Club in Auburn (home to the University of Washington golf teams) and The Golf Club at Redmond Ridge.
McGarey said they were initially rebuffed by Oki to sell. But after Oki sold his Echo Falls golf course, he reached back out saying he was more open to a deal, McGarey said.
Conway said he then contacted another partner, a Seattle-area real estate broker named Don Lewison who happened to live across the street from Oki on the Eastside.
Oki, his CEO and CFO met in Lewison’s house with the three consultants, where they told Oki they had a buyer willing to spend $151 million on the courses. They ultimately produced a letter of intent for the purchase and gave it to Oki, who was interested, Conway said.
That’s when things started to go off track, McGarey said. They worked with their buyer’s local contacts, but communication began to slow in 2016.
Then in October 2016 Conway said he “went ballistic” when he read in The Seattle Times that, Oki had agreed to sell the properties for $137.5 million to someone else — HNA Holdings, a fast-growing conglomerate that in addition to Hainan Airlines has invested in Deutsche Bank, Hilton Hotels and Spokane-based Red Lion Hotels.
But it was no random buyer: It turns out HNA’s long-time co-chairman, Wang Jian, is the brother of Wang Wei — the buyer on whose behalf the three consultants had been working, The New York Times reported this week.
The Times reported that Wei has been central to HNA’s business growth even though his involvement with the company and relationship to HNA’s chairman has been rarely, if ever, disclosed.
McGarey said he reached out to Wang Wei’s family and was told the sale to his brother’s company was coincidental, but since then he has been ignored. Even Lewison tried talking to his neighbor, Oki, but was directed to Oki’s personal lawyer, McGarey said.
“How can you say this is coincidental?” he said.
Conway said of Oki: “We thought he was an honorable person and good to his word and that doesn’t seem to be the case,” he said.
Oki Golf, which after the sale continues to operate the courses, did not respond to requests for comment. Oki and HNA declined comment to the New York Times, and Wang did not return calls to the paper.
McGarey said he had arranged a 3 percent “success fee” with Wang Wei for the purchase of the golf courses; based on the final price, that would have netted him $4.1 million. The trio also had told Oki they would request a commission on the seller’s side of the deal — though no contracts were signed — which could have produced a similar amount. The three consultants planned to split the commission as equal partners, he said.
They said they took trips to the Seattle area during their work identifying and valuing the properties, and meeting with local family members of Wang Wei who were helping with the potential transaction. Much of that work has been uncompensated, they said, though McGarey did receive a $10,000 retainer from West Coast Golf Club.
McGarey said they have contacted lawyers to discuss legal action but have not taken any formal steps yet.
“One way or another we’re going to get paid on this deal, I would hope,” he said. He noted he was especially disappointed because he has worked with Hainan Airlines in the 1990s, helping design a golf course for the company in China.
But there’s another complication: The New York Times and others report the Chinese government has begun cracking down on the country’s “most aggressive acquisitors to pare down their debt,” and has seized control of another prominent company, Anbang Insurance Group.
“In the current climate, HNA, which has amassed about $90 billion in debt, is reversing course and selling off assets,” the Times reported. “Other pending deals by the company remain in limbo.”
It’s unclear whether the crackdown means HNA at some point may have to sell the Oki Golf courses.
“Life goes on, but I would hope we aren’t too late by the time the Chinese government (is done) clamping down,” McGarey said.