Having triggered a hostile takeover of Hong Kong’s third-largest carrier, former director Zhong Guosong has served a writ on four directors of ailing Hong Kong Airlines. The directors are chairman Hou Wei, Wang Liya, Sun Jianfeng and Tang Kit, all of whom have ties to controlling shareholder HNA Group. The writ, which was served Tuesday, April 23, preventing them from interfering, sabotaging, or making decisions beyond the normal operation of the business, unless approved by Zhong and his rival board.
Acting on behalf of current management, the airline’s in-house PR team, confirmed in a statement that it had received the court orders. “The orders are temporary, pending further confirmation by the court and are subject to change,” the statement stated. “In any event, they do not affect the day-to-day operations of the airline. We continue to operate as normal and there are no changes to our management.”
A statement released by Zhong’s agency said: “Hong Kong Airlines’ majority shareholders wish to reiterate that the reason for taking this action is to secure Hong Kong Airlines’ financial future, which remains under significant financial stress.” The new directors were named as Zhong Guosong, Wong Kum-sum, Leung Jo-yee, Huang Che Kuang, Zhang Sheng and To Wai-wa.
Confusion over the airline’s ownership surrounds the sale of 172.5 million shares to Grand Capital City Investment for HK$546.5 million (US$69.7 million) on April 11 this year. The shares, an approximate one-third stake, were owned by Frontier Investment Partners and the documents confirming the sale were signed by Zhang Ziyan, but it has not been confirmed whether he had been authorized by Frontier to carry out the transaction. If the transaction proves to be invalid, then Frontier would remain the majority shareholder as HNA currently hold only 29 percent.
