Lawmakers are calling for a deeper look into of HNA Group’s pending and past takeovers of American companies, which could result in repealing the approval of earlier deals.
Read: You’ve Never Heard of HNA Group. Here’s Why You Will
The Wall Street Journal says the call for probes follows recent allegations by U.S. firm Ness Technologies that the Chinese conglomerate provided “knowingly false, inconsistent, and misleading information” regarding ownership and ties to the Chinese government during an interagency panel review. According to the WSJ, Ness Technologies had been trying to sell a New Jersey-based software engineering subsidiary to a Beijing-based unit of HNA for $325 million.
A spokesperson for HNA disputed the allegations, telling the WSJ, “This baseless and extortionist lawsuit by Ness makes egregiously inaccurate and fanciful claims that HNA has ties to the Chinese government and willfully misled CFIUS.”
Read: Mammoth Chinese Conglomerate HNA Group Reveals New Details About Its Ownership
The complaint added fuel to the fire of some on Capitol Hill, who have grown increasingly uneasy about the confusing ownership structure of the Chinese conglomerate since a July announcement revealed that a charitable foundation owned more than half of the firm and company executives and board members owned most of the rest. Reuters this week reported that regulators in New Zealand blocked an HNA deal for similar worries. Last month, Swiss regulators announced that the group had failed to disclose that company executives held stakes in the conglomerate during HNA’s $1.5 billion takeover in 2016 of airline caterer Gategroup.
“If these allegations are true, the government should consider using its ability to suspend future HNA transactions or retroactively reopen previous HNA agreements,” Rep. Robert Pittenger (R., N.C.) said in a statement to the WSJ, referring to the Ness lawsuit.
Read: China’s HNA Group Is Looking to Offload Billions in Overseas Property Amid Worries About Its Debt
HNA Group has billions of dollars of U.S. investments, and has announced acquisitions in excess of $50 billion in the past two years. The conglomerate has now reversed its spree, and announced that it’s offloading commercial properties in major cities as it looks to pay off the debt that has funded these acquisitions. The company’s liquidity has come under pressure and borrowing costs have increased, prompting investors to ask exactly how the company intends to pay off tens of billions in debt that comes due in 2018.
