Embattled Chinese conglomerate HNA Group has been hit with yet another lawsuit. The latest litigation against the company was filed by Deloitte Advisory, a consultancy unit of accounting giant Deloitte, late last week at the Court of Instance at Hong Kong's High Court.
The lawsuit filed against debt-laden Haikou-based company is over its unpaid fees of over HK$4 million or roughly around $516,000. The suit was filed directly against HNA Group's Shanghai-based subsidiary HNA Technology, formerly known as HNA Logistics Group.
Deloitte Advisory did not elaborate on the types of services it had provided to HNA in its court documents. It did, however, reveal that the unpaid charges were part of an agreement reached by both companies back in 2016. In its suit, the company demanded that HNA Technology pay the fees within 14 days or contest the writ. If it failed to do so, Deloitte Advisory warned that it might be forced to take further legal action against the company.
The lawsuit is the latest in a series of litigation against the company, which has been largely unable to meet its financial obligations. Due to its financial woes and growing multi-billion dollar debt, the Chinese government has had to step in to help the company manage its finances. HNA Group's core aviation portfolio has been hit hard by the massive slump in travel demand, resulting in billions of dollars in losses.
Last week, China Joy Shipping filed a second petition against the company seeking the immediate liquidation of its assets so that it can pay its debts. A trial involving a petition is scheduled to be held on August 26 in Hong Kong. In 2016, China Joy had filed a similar petition over HNA Group's unpaid debts to the company.
HNA Group accumulated its debts after a massive global asset shopping spree that started in 2015. Most of its billion-dollar acquisitions, including the purchase of properties and stakes in Deutsche Bank and Hilton Hotels, were fueled by loans. The company halted its acquisition activities after China had cracked down on debt-fuelled asset purchases. HNA Group was forced to become a net asset seller, reducing its debts by 40 percent to around $73 billion as of June last year.
The company is still continuing to liquidate its assets to meet its debt and interest payments. Last month, the company sold its stake in a 20-story office building in Shanghai to a state-backed debt management company for $502.9 million.
