Chinese Conglomerate HNA Group Slumps Into Bankruptcy
The parent of Hainan Airlines is looking to restructure its debts and shed non-core subsidiaries after coming under government control.
One of China's most aggressive buyers of overseas businesses says it is bankrupt, and will seek reorganizing. Shares of affiliates of the HNA Group have slumped on Monday as a result.
HNA, the parent of the Chinese carrier Hainan Airlines, says it has received a formal notice from Hainan High People's Court, in which a creditor has filed for the reorganization of the company because it cannot pay off its debts.
The subsidiaries Hainan Airlines, HNA Infrastructure and CCOOP also said on Saturday that US$9.6 billion has been embezzled by shareholders and other related parties, according to Reuters. The companies gave no further details, but the announcement sets up the prospect of criminal retribution against the former owners and managers of the companies. It's common practice in China for courts to establish financial fraud in cases where the Communist Party wants to take a tycoon down.