By Jennifer Hughes
HONG KONG (Reuters) – Embattled Chinese language conglomerate HNA Group has denied accusations of embezzlement and monetary irregularity made by a rival group of shareholders in Hong Kong Airways (HKA) as the 2 sides combat for management of the struggling service.
The allegations had been made by Zhong Guosong and Frontier Funding Associate who between them management 61 % of HKA’s shares. On Tuesday, they declared they’d taken management of the service and made Zhong, a former HKA director, chairman after a unprecedented shareholder assembly.
The pair stated on Wednesday, by way of a spokesperson, that an investigation had been launched into “the embezzlement of HKA property and severe monetary misappropriation by HNA Group events.”
In an emailed assertion to Reuters on Friday, HNA stated that the allegations “are false”.
“HNA Group is dedicated to the very best requirements of integrity in all of its actions and expects the identical of all of its representatives,” it added.
HKA’s web site nonetheless lists Hou Wei as chairman.
Hou joined HKA in September final 12 months after greater than 4 years with HNA-controlled Hainan Airways, in accordance with his LinkedIn (NYSE:) profile.
HNA holds about 29 % of HKA, having lower its majority holding two years in the past.
This week’s battle comes as HKA is struggling to outlive. Earlier this month, airline executives advised shareholders the corporate wanted no less than HK$2 billion ($254.95 million) to keep away from the danger of dropping its working license – and that it swung to a lack of about HK$three billion final 12 months.
Zhong and Frontier representatives at that assembly, nevertheless, demanded particulars of the 2018 accounts and questioned the shut ties between HKA and HNA associates, which embody loans and fairness investments by HKA to HNA teams, in accordance with HKA’s 2017 accounts seen by Reuters.
On Thursday this week, the 2 sides clashed once more when Zhong and Frontier accused HNA of storming HKA’s head places of work and eradicating paperwork – claims denied by an HKA spokesperson.
HKA stated later that day that the additional safety workers seen within the foyer and lobby of HKA’s places of work had been to protect order that had been disrupted by the shareholder dispute.
On Thursday night, Hong Kong’s Transport and Housing Bureau stated it had met with representatives for either side and was monitoring the scenario.
It added that the Civil Aviation Division had stepped up its oversight of HKA’s flight operations to make sure no disruption over the vacation weekend.
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