(Reuters) - Chinese conglomerate HNA Group has dropped its bid for most of SkyBridge Capital, a hedge fund investment firm founded by U.S. President Donald Trump’s former aide Anthony Scaramucci, as the deal was still stuck with U.S. regulators after more than a year.

FILE PHOTO: A HNA Group logo is seen on the building of HNA Plaza in Beijing, China February 9, 2018. REUTERS/Jason Lee/File Photo

Scaramucci, who was White House communications director for 10 days last year, will return to SkyBridge as co-managing partner to focus on strategic planning and marketing efforts, the two companies said in a statement late on Monday.

The deal’s termination extends the list of unsuccessful acquisitions by Chinese companies in the United States, at a time when Trump is trying to pressure China’s government to be more accommodative on trade issues which he deems uneven.

It also comes as regulators worldwide increase scrutiny of debt-laden HNA after a $50 billion acquisition spree over two years sparked interest in its opaque ownership and use of leverage. The firm has since seen some pending deals collapse.

HNA announced its intention to buy the majority of SkyBridge in January 2017. The terms were never made public.

The two companies aimed to close the deal within six months subject to approval from the Committee on Foreign Investment in the United States (CFIUS), which scrutinizes foreign purchases of U.S. assets to protect national security interests.

In a joint statement, the pair said it was no longer in their interests to pursue the deal as significant time had passed and due to the “uncertain timing” of the approval process.

SkyBridge and HNA Capital, a unit of the financial services-to-aviation conglomerate, now plan to explore the development of a “mutually beneficial marketing and distribution arrangement” of SkyBridge’s offerings in China.

INCREASED SCRUTINY

CFIUS has been tightening scrutiny of Chinese companies’ acquisitions of American companies under the Trump administration, with the HNA-SkyBridge deal becoming latest high-profile victim.

In January, CFIUS rejected Ant Financial's [ANTFIN.UL] application to buy money transfer company MoneyGram International Inc MGI.O citing national security concerns.

HNA and SkyBridge in their statement said CFIUS had “offered a path to approval subject to certain mitigation,” without elaborating on mitigation measures.

Two people familiar with the matter, who declined to be identified due to the sensitivity of the matter, said CFIUS had declined to accept HNA’s application to review the deal.

One of the people said the refusal was because HNA kept changing details of its ownership.

A call to Scaramucci late on Monday New York time was not answered. CFIUS could not be reached outside of regular business hours.

Earlier this year, Reuters reported, citing a person familiar with the matter, that the U.S. government would not approve any investment by HNA until the group provided adequate information on the identity of its shareholders.

In a separate statement, an HNA Group spokesman who declined to be named said the deal failed to close because the companies had withdrawn their request for a CFIUS review.

“This does not mean that CFIUS declined to clear the transaction on national security grounds,” the spokesman said.

ACQUISITION SPREE

HNA is currently restructuring operations and selling assets to raise cash, partly to repay debt.

Since the start of 2018, it has agreed to sell over $10 billion worth of real estate in Australia, New York and Hong Kong, along with shares in Deutsche Bank AG DBKGn.DE, and Hilton Worldwide Holdings Inc HLT.N.

New Zealand’s Overseas Investment Office (OIO) blocked an attempt by the group to buy a vehicle finance firm in part due to doubts about the debt-laden conglomerate’s financial stability, documents showed this month.

In July, a $416 million investment in U.S. in-flight services firm Global Eagle Entertainment Inc ENT.O was abandoned after failing to clear CFIUS' review process.

HNA’s bid for SkyBridge, founded by Scaramucci in 2015, was part of a strategy to build a global asset management business.

SkyBridge had about $10 billion in assets under management or advisement as of February. Its investment offerings include commingled funds of hedge fund products, customised separate account portfolios and hedge fund advisory services.

SkyBridge will continue to be led by current senior management, the statement showed.