November 25, 2017 / 5:01 PM / 18 days ago

CORRECTED-China's HNA gave "untrue" details during Gategroup takeover- Swiss watchdog

(Corrects to remove incorrect stock code for the HNA conglomerate and to say fee, not fine in para 9)

VIENNA, Nov 25 (Reuters) - Chinese conglomerate HNA gave partially untrue or incomplete information during the takeover of Gategroup, the Swiss Takeover Board said, but HNA replied that it had provided all necessary information and the deal would not be affected.

In April last year, aviation and shipping group HNA agreed an all-cash deal to buy airline catering firm Gategroup for $1.5 billion. It has announced $50 billion of acquisitions in just over two years.

HNA’s debt-fueled strategy peaked this year when it bought stakes in Hilton and Deutsche Bank, but bankers have voiced concern about HNA’s leverage levels and ownership structure.

The Swiss regulator said in a statement provided in English late on Friday that some information given by HNA’s aviation branch “as disclosed in the Offer Prospectus dated 20 May 2016 is partially untrue respectively incomplete”.

HNA said in a statement that it “fully cooperated with the Swiss Takeover Board and provided the necessary information. HNA acknowledges the Swiss Takeover Board’s determination on the subject.”

“The decision ... does not have any impact on the validity of the takeover of Gategroup as such, which has been successfully completed. This ruling addresses a very specific event in May 2016 in Switzerland which is naturally not being investigated in any other jurisdiction,” HNA said.

The Takeover Board said that stakes in HNA Group held by Bharat Bhisé and Jun Guan amounted to 17.15 percent and 12.01 percent, respectively, and not – as specified in the offer prospectus of May 20, 2016 – 17.40 percent and 12.35 percent.

“Bharat Bhisé and Jun Guan held their participations in HNA ... as trustees for Chen Feng, Wang Jian, Tan Xiangdong, Li Xianhua, Li Qing as well as Chen Wenli, which is why the latter should have also been disclosed as beneficial owners of these participations in the offer prospectus,” it said.

“Chen Feng, Wang Jian, Tan Xiangdong, Li Xianhua, Li Qing as well as Chen Wenli should have been disclosed as a group controlling HNA Group Co, Ltd and thus indirectly also controlling HNA Aviation (Hong Kong) Air Catering Holding Co in the offer prospectus of 20 May 2016.”

The board mandated Ernst & Young to check whether the group consisting of Chen Feng, Wang Jian, Tan Xiangdong, Li Xianhua, Li Qing and Chen Wenli as well as Bharat Bhisé and Jun Guan had complied with minimum price and best price rules.

HNA is also to pay a fee of 50,000 Swiss francs ($51,000). ($1 = 0.9796 Swiss francs) (Reporting by Shadia Nasralla and John Miller; Editing by Dale Hudson)

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