News
Australia scrutinizes HNA Group control of Virgin Australia holding
January 12th 2018
Australia said Mainland conglomerate, HNA Group, has failed to provide due diligence to the Australian Stock Exchange (ASX) regarding updates on how the group’s 19% equity in Virgin Australia was controlled, the Sydney Morning Herald has reported. Read More »
Under Australian corporations law, investors that control more than 5% of an ASX-listed firm must notify the company and the ASX when they increase or decrease their holdings. HNA did not do that and said it failed to include several relevant parties because of “an oversight”.
HNA said all its companies in the “chain of ownership down to the entity directly holding [Virgin Australia] shares” were disclosed but “sister companies of those entities were incorrectly omitted as they do not directly or indirectly have an interest in those shares, but instead are deemed to have a relevant interest under the Corporations Act”.
HNA Group is increasingly feeling the heat from regulators and watchdogs worldwide, which are criticising the conglomerate’s myriad and byzantine ownership structures and lack of transparency.
Late last year, HSBC advised its bankers against writing deals with HNA and New Zealand has blocked HNA’s planned US$600 million purchase of ANZ’s UDC finance unit.
There is increasing pressure on HNA to reassure investors of its financial soundness after it went on an estimated US$40 billion plus global investment spree in the last two years.
HNA’s acquisitions have included Germany’s Hahn Airport, substantial holdings in technology companies, the purchase of ground handler, Swissport, for US$2.8 billion, US$1.9 billion for caterer Gategroup, 25% of the global Hilton hotel group for US$6.5 billion and 9.6% of Deutsche Bank for a speculated US$4.5 billion.
In November, Swiss authorities said the group also provided false information when acquiring Gategroup.
