Exclusive | Self-proclaimed Hong Kong Airlines chairman obtains injunction in battle for control with HNA Group
- Sources say former director Zhong Guosong has taken legal step in bid to stop rivals from interfering in running of carrier
- Lawyers from both sides reportedly met on Monday to thrash out a settlement
A former director of Hong Kong Airlines who claimed to have seized control of the financially struggling company last Tuesday has obtained an injunction against the HNA Group, the carrier’s controlling shareholder, according to sources.
The move by Zhong Guosong is set to up the stakes in a row that has pitted two factions of the group against one another in laying claim to Hong Kong’s third largest airline, which is in deep financial trouble and risks being stripped of its operating licence by the government.
The legal measure is understood to have been taken to prevent the airline’s current management or rival shareholders from interfering, sabotaging or making decisions beyond the normal operation of the business, sources said. It is unclear if the injunction also prevents specific individuals from accessing company property.
A separate source said the injunction targeted four current and ex-employees of Hong Kong Airlines, rather than the controlling shareholder HNA.
This came as the Post learned that the government had set a Wednesday deadline for the company to confirm who was really in charge. Lawyers from both sides met on Monday to try to settle the dispute.
The injunction is expected to be served on Tuesday to HKA executives, and could shed more light on the legal shareholding structure.
As of 9.30am on Tuesday, an injunction had not yet been served.
The measure may also add weight to the claims by Zhong, the airline’s self-proclaimed chairman, that he was in “legal control” of the company after a vote of shareholders at an extraordinary general meeting last week, where he joined forces with Frontier Investment Partners and proclaimed himself chairman.
HNA, the debt-laden Chinese conglomerate, declined to comment on the injunction and a spokeswoman for Zhong from FTI Consulting said it had “no comment at this time”.
But HNA and a rival faction with links to the corporation led by Zhong are feuding in a battle of the shareholders, with both claiming control of HKA.
HNA Group breaks silence on boardroom chaos at Hong Kong Airlines
Over the past week, claims and counterclaims of financial mismanagement, theft of proprietary documents and even of break-ins at the carrier’s headquarters have overshadowed the operating airline’s deepening financial crisis.
Last Tuesday, Zhong’s representatives claimed financial documents had been removed from the airline’s headquarters in a suitcase and blamed HNA. A complaint was filed, however, police said it was not a criminal matter.
On Wednesday, Zhong even accused HNA of “serious financial misappropriation” without providing any evidence.
On Thursday, the power struggle took a deeper turn as Zhong’s team accused the other side, representing the interests of Chinese conglomerate HNA, of storming the company premises in the early hours of the morning and taking away more sensitive company material.
But HNA said in response all allegations of wrongdoing “with respect to HNA Group are false”.
Both factions are vying for control of Hong Kong Airlines Co Limited, holding company of the operating business Hong Kong Airlines Limited.
Zhong owns a 27 per cent stake in the carrier through Hong Kong Airlines Consultation Service (HKACS), while the private equity firm holds 34 per cent. HNA has a 29 per cent share. Though sources said Frontier had since been sold and did not back Zhong’s takeover.
