19 April, 2019

Trouble at Hong Kong Airlines as shareholders battle it out

The Chinese HNA Group has strongly denied accusations of embezzlement, financial irregularities and mismanagement made by a rival group of shareholders in Hong Kong Airlines (HKA) as the two battle for control of the troubled airline.

Zhong Guosong and Frontier Investment Partner hold 61% of the firm and made the allegations earlier this week as well as declaring they had taken control of the carrier as well as making Zhong Guosong the chairman after a special extraordinary shareholder meeting on Tuesday.

According to local media, an investigation has been started into the embezzlement of Hong Kong Airlines assets and other serious financial misappropriation by the HNA Group.  However, the Chinese conglomerate refuses the allegations,  a spokesperson told news agency Reuters they were flase, whilst assuring that the "HNA Group is committed to the highest standards of integrity in all of its activities and expects the same of all of its representatives,"

HNA holds around 29% of  Hong Kong Airlines which recently requested further funding of at least HK$2 billion that's around $254.9 million to continue flying and retain its operating license.

Towards the end of the week, Hong Kong’s Transport and Housing Bureau confirmed it had met representatives from both sides to try to rectify the situation and was monitoring developments. The Civil Aviation regulators also advise it had stepped up oversight of HKA's operations because of the ongoing situation at the airline that reported losses of some HK$3 billion last year.

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