The finances of budget carrier Norwegian came under scrutiny yesterday in a detailed Sunday Times report.
The boss of the airline was claimed to have been lending some of his shares to traders betting on a downturn in its fortunes.
Bjorn Kjos, the biggest shareholder in Norwegian, has been lending his shares to “improve liquidity” in the company’s stock, according to its annual report.
Europe’s third-largest low cost carrier, has been under fire from short-sellers over fears about its heavy debt pile and fragile finances.
At one point late last year up to 25% of its shares were out on loan — reflecting demand for short-selling, according to the newspaper.
Short sellers bet on falls in a company’s share price.
Industry sources reportedly said Kjos has been earning a margin by lending his shares to short-sellers. While there is nothing illegal about this, it raises questions about governance and transparency.
Kjos did not respond to requests by the Sunday Times for comment.
Norwegian has been undercutting rivals by offering cheap transatlantic flights, but is labouring under an estimated debt pile of 83 billion Norwegian krone (£7.6 billion).
British Airways owner International Airlines group took at 4.6% stake in Norwegian earlier in April, prompting interest in the airline from other potential bidders.