China’s HNA Group starts hunt for investors for airlines
China Development Bank fined ¥42.7mn for HNA loan guarantee
19.03.2021 – 00:38 UTC
The Hainan branch of the government-owned China Development Bank (CDB) has been fined exactly CNY42.6616 million yuan (USD6.56 million) for issuing an external guarantee for a loan to HNA Group without authorisation, according to a statement from the State Administration of Foreign Exchange (SAFE), the Chinese government’s foreign exchange and international trade agency.
The Hainan branch of the foreign exchange regulator released the statement on March 10, showing that the bank had provided an “unauthorised provision of external guarantees” and had violated the agency’s rules on cross-border guarantees, resulting in the fine and a warning.
Sources told Caixin Media that the CDB had illicitly provided a letter of guarantee on the request of flagship firm Hainan Airlines Holding in 2017. This was used to secure a CNY2 billion (USD308 million) loan taken by an “overseas” HNA unit, the Hong Kong subsidiary of Grand China Air (CN, Haikou), from an overseas branch of a large Chinese state-owned bank.
The CDB allegedly failed to conduct a reasonable review of the authenticity of the loan,…
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