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HNA Group Co. said it failed to fully disclose how its $350 million stake in Virgin Australia Holdings Ltd. is controlled, less than a month after regulators in New Zealand blocked an acquisition citing the Chinese conglomerate’s opaque ownership structure.
Five substantial holder notices to the Australian stock exchange in 2016 and 2017 relating to HNA’s 20 percent stake left out entities with a “relevant interest” in the airline, the Chinese company said in a letter to Sydney-listed Virgin Australia that was disclosed by the bourse on Jan. 8.
HNA’s belated disclosure lists 518 entities from South America to Asia that appear to deal in everything from hotels and refrigerated trucks to aviation and car rentals. The date on the letter — Jan. 2 — is just days after the Overseas Investment Office of New Zealand barred HNA’s purchase of a local asset-finance business.
Questions about HNA’s ownership have attracted the attention of regulators from Australia to Switzerland and the U.S. As pressure mounted last year, HNA in July announced it was controlled by two charities — one based in New York and another in Hainan.
The omission in the Virgin filings was “due to an oversight,” HNA said in its letter. While HNA companies “in the chain of ownership” of the Virgin stake were included in previous notices, “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 Australian law, the company said.
A representative for HNA was unable to comment immediately on the filing. A spokeswoman for Virgin Australia declined to comment.
Australian law defines “relevant interest” in shares as ownership, or having control over voting rights or the sale of the stock.
–With assistance from Prudence Ho
©2018 Bloomberg L.P.