Swiss watchdog fined chinese HNA for "untrue" details

Chinese conglomerate HNA, under scrutiny at home and abroad over a debt-fuelled acquisition spree, gave partially untrue or incomplete information during the takeover of Swiss airline catering firm Gategroup last year, the Swiss Takeover Board said.

In a statement late on Friday, the regulator said the aviation and shipping group had failed to disclose that company executives held controlling stakes in the conglomerate and also gave incorrect shareholdings for the top two stakeholders – Bharat Bhise and Guan Jun – in the Gategroup offer prospectus.

The regulator has asked consultant group Ernst & Young AG to look into whether the controlling group complied with minimum price rules and best price regulations in the deal. 
The Swiss also will impose a fee of 50,000 Swiss francs on HNA and on its unit HNA Aviation (Hong Kong) Air Catering Holding for the proceeding.

The Swiss regulator said Bhise and Guan had acted as trustees holding shares for HNA co-chairmen Chen Feng and Wang Jian, Chief Executive Adam Tan and three other people, and they should have been listed as beneficial owners in the offer prospectus.

"Chen Feng, Wang Jian, Tan Xiangdong, Li Xianhua, Li Qing as well as Chen Wenli should have been disclosed as a group controlling HNA Group Co, Ltd and thus indirectly also controlling HNA Aviation (Hong Kong) Air Catering Holding Co in the offer prospectus of 20 May 2016," the Swiss Takeover Board said.

The Takeover Board also said that stakes in HNA Group held by Bhisé and Guan amounted to 17.15 percent and 12.01 percent, respectively, and not – as specified in the offer prospectus of May 20, 2016 – 17.40 percent and 12.35 percent.

HNA shook up its ownership structure in July by transferring the near 30 percent stake held by the two men to a newly formed charity in New York.

Headquartered in the southern Chinese island of Hainan, privately owned HNA has fielded many questions about its shareholding structure this year after Guo Wengui, a fugitive Chinese billionaire, alleged that "officials in China'sCommunist Party and their relatives were undisclosed shareholders" in the group.

A HNA spokesperson said the group cooperated fully with the Swiss board's inquiry, and it respects its authority in this matter.