HNA units under investigation linked to embezzlement: sources

Two listed subsidiaries of HNA Group have revealed that they are subject to an investigation that sources with knowledge of the matter said may be linked to allegations that shareholders embezzled company funds and illegally used corporate assets as collateral for loans. The investigations mark the government's latest move in untangling the risks posed by the formerly freewheeling financial conglomerate, which is now going through bankruptcy restructuring. Shanghai-listed Hainan Airlines Holding disclosed Friday it had received a China Securities Regulatory Commission (CSRC) notice the same day that said the regulator had launched an investigation into the company on suspicion that it violated information disclosure laws and regulations. The CSRC accused the company of breaching China's Administrative Punishments Law and Securities Law, according to a filing released on the Shanghai Stock Exchange late Friday. Founded in 1989 as a state-owned airline before becoming a privately controlled joint-stock company in 1992, the parent of the two companies, HNA Group, went on to become one of China's largest airlines. HNA got into trouble after it veered from its core aviation business early in the last decade and went on a global shopping spree that included buying stakes in Hilton Worldwide Holdings, airport retail giant Dufy America and Deutsche Bank.<br/>