Daily Management Review

Multi-billion dollar embezzlement revealed in HNA Group


Several companies within the diversified conglomerate HNA Group have reported theft and misappropriation of funds totalling at least $9.8bn.

Multi-billion dollar embezzlement revealed in HNA Group
The allegations came after HNA Group announced last Friday that it had filed for bankruptcy and reorganisation at the initiative of its court-appointed creditors.

According to Bloomberg, Hainan Airlines Holdings, HNA Infrastructure Investment Group, CCOOP Group and others are among the companies that have reported wrongdoing. Their statements, quoted by the agency, said the companies discovered large-scale embezzlement after conducting "internal audits". 

The companies said that misuse of loans was detected, and in addition, some shareholders and affiliates had used company property or funds to pay their own debts. The companies are now looking for possible solutions to the problems identified, their statements read.

Last Friday, HNA Group announced that its creditors had filed for bankruptcy and reorganisation proceedings against the group, which has accumulated multi-billion-dollar debts to them. HNA Group, which was founded in 2000, has been annually spending tens of billions for several years buying foreign assets, often through loans. 

As a result, by 2017 the group had accumulated debts of almost $100 billion, forcing it to start selling off assets. Its portfolio included stakes in Deutsche Bank, Gategroup Holdings, Swissport International, hotel chains Park Hotels & Resorts, Hilton Grand Vacations, NH Hotel Group, Red Lion Hotels, properties in New York, Sydney, Hong Kong, London, etc.

source: bloomberg.com