Two factions are fighting for control of the airline and one side has made an explosive claim of break-in and theft. Now a court has ordered the airline to publicly choose a leader. Welcome to the drama of Hong Kong Airlines.
In one corner is Zhong Guosong, the self-proclaimed chairman of Hong Kong Airlines (HKA). He asserted control of Hong Kong Airlines after meeting with shareholders. Less than 24 hours later, though, Hou Wei asserted that he was still in charge as chairman. In the other corner, Chinese conglomerate HNA Group, which holds a plurality of shares in the troubled airline.
Guosong and representatives from HNA Group were scheduled to sit down last Thursday to discuss the future of the airline. Instead, Guosong lodged accusations that HNA staff had broken into the headquarters of Hong Kong Airlines and stolen financial documents.
HKA’s controlling shareholders confirm the reports that HNA Group representatives stormed HKA’s office this morning, and it is believed that financial information was taken away or destroyed in the process.
For its part, HKA officially denies this claim. It added:
As a private company, Hong Kong Airlines does not comment on its shareholding structure. However, we believe that our stakeholders will solve the issue in a professional and impartial manner.
That “private company” line has been used as a continuing excuse to essentially keep the public in the dark as to what is really going on at beleaguered HKA.
Why would financial documents be stolen? That’s precisely the problem. We don’t know. HKA has been cutting routes while threatening to sue those who question its financial health. All of this intrigue diminishes public confidence in Hong Kong’s #3 airline.
A New Twist
And today, a new twist. Guosong secured an injunction from a Hong Kong court prohibiting Wei and his board members from exercising decisionmaking authority. In fact, the injunction bans them from setting foot on the HKA campus. The Hong Kong government has given Hong Kong Airlines until the end of the day today to confirm who is in charge.
Meanwhile, a mysterious entity called Grand City Investment Capital (GCIC) has claimed it acquired a 34% stake in HKA and blasted Guosong for his meddling. As Danny Lee of the South China Morning Post reports, virtually nothing is known about this new entity. But if the purchase is confirmed, Guosong will lose control.
The mystery of HKA remains. We know there is in-fighting. We know there have been losses. But we don’t what is going on behind closed doors other than a prolific power struggle. We don’t know if the 34% acquisition by GCIC is legitimate or not. But now the Hong Kong government is threatening to revoke HKA’s flying license unless this matter is resolved. One way or another, we will likely soon have a resolution.
Image of Zhong Guosong: Hong Kong Airlines