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NH chair asked to step down citing HNA conflicts

Citing conflicts of interest related to major shareholder HNA Group’s recent purchase of Carlson Hotels Inc., London-based hedge fund Oceanwood Capital Management LLP is calling for the chairman of Spain’s NH Hotel Group to temporarily stand down, according to a Friday report by The Wall Street Journal.

Oceanwood, which owns a 10% stake in NH Hotel Group, wrote to the board Wednesday asking that Charles Mobus and three other directors who represent China’s HNA Group, which owns 29.5% of NH, step aside until the perceived conflict of interest that compromises the independence of the board is resolved.

More specifically, Oceanwood cited how HNA’s deal for Carlson means that unless it sells down its stake in Rezidor Hotel Group, it has to make an offer for the remaining shares in Brussels-based company, which is part-owned by Carlson and competes with NH in Europe.

“We perceive a strong conflict of interest in the chairman of the Board of NH having his own company advise HNA on the takeover of a competitor company,” Oceanwood wrote in the letter. The Wall Street Journal reported that Mobus isn’t an employee of HNA but works for a U.S. advisory firm that acts for HNA.

In the letter, Oceanwood further stated that the Carlson deal could influence the directors representing HNA when assessing NH’s strategies, or a potential merger between NH and Carlson.

NH has already gone on the record stating there is no conflict of interest relating to the Carlson deal and measures have been taken to monitor potential conflicts.

NH told The Wall Stree Journal that Oceanwood’s proposal would be on the agenda at its annual general meeting in Madrid next month, but declined to comment further.

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