Units of China's HNA Group Co. Ltd said they had discovered as much as $10 billion that had allegedly been embezzled - driving their share prices down Monday.
The shares of HNA Investment Group fell more than 10% Monday on the Shenzhen exchange. HNA-related stocks, including Hainan Airlines Holding, HNA Innovation, CCOOP Group, HNA Technology and Bohai Leasing fell between 5% and 10%.
The company added Sunday in a stock exchange filing that some creditors had called for a bankruptcy restructuring.
Several subsidiaries reported the discovery of irregular cash outflows in the billions within hours after the petition. The irregularities were discovered by a state-appointed working group.
HNA's flagship unit, Hainan Airlines, said the company could be placed on probation by the Shanghai Stock Exchange and might be delisted.
The missing cash indicated "big holes being savagely built up and dug up," according to the leader of the state-appointed working group looking into HNA.
Gu, who is also HNA's Communist Party secretary, said the lapses would need to be "treated one by one."
Gu told HNA employees the company was attempting to overcome its biggest challenge yet. The letter was released to employees days after HNA Group founder Chen Feng was left out of the company's Communist Party committee - indicating Chen had been removed from the group's decision making.
HNA's problems date back to the beginning of its acquisition spree in 2017, when the once conglomerate borrowed heavily to acquire brand-name assets and stakes in various groups.
China financial regulators raised concerns over the acquisitions because they had the potential to put the country's banks at risk. The regulators called on HNA to halt its acquisitions.
HNA Group was also affected by the COVID pandemic. The aviation and tourism sectors were among the hardest-hit industries.
It is unknown how many employees might be affected by the restructuring but news reports said the conglomerate owned more than 2,300 companies.
