Suntech has said it suspects that the collateral related to the security interest may not have existed and it may have been a victim of fraud. The Chinese photovoltaic module manufacturer had guaranteed payment obligations related to finance facilities provided to an investee company of GSF amounting to about 554.2 million in May 2010. As security for its obligations under the guarantee, Suntech received a pledge of German government bonds amounting to 560 million from GSF Capital Pte. Ltd, a third party investor of GSF.
Suntech, in its decision to monetize its investment in GSF, engaged outside counsel to review and assist in the process. Through this counsel, it has recently come to light that certain facts and circumstances suggest that the bonds may not have existed and Suntech may have been a victim of fraud.
Zhengrong Shi, Suntech's chairman and CEO said, "We are very disappointed that this has occurred and it has the highest level of attention from the company and the board, including the Audit Committee. There is no indication that management had any involvement, and we are vigorously pursuing all avenues to resolve this matter and ensure that we protect the interests of our shareholders." Shi added that Suntech's daily operations will not be impacted by the news.
The findings are not yet conclusive though and Suntech is continuing its investigations. Claims against relevant parties in multiple jurisdictions to assert control of GSF and its assets have been filed. The company also thereby seeks to protect the interest of its shareholders. To the best of its knowledge, it said, payments of all scheduled obligations under such finance facilities remain current. Until the investigation and financial assessment is completed, the earnings announcement for the second quarter of 2012 may be delayed, it added.
Suntech will be hosting an investor conference call today at 0830 US Eastern time to discuss the above-mentioned matters. A live and archived webcast of the conference call will also be available here.
Popular content
This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.
Share
By submitting this form you agree to pv magazine using your data for the purposes of publishing your comment.
Your personal data will only be disclosed or otherwise transmitted to third parties for the purposes of spam filtering or if this is necessary for technical maintenance of the website. Any other transfer to third parties will not take place unless this is justified on the basis of applicable data protection regulations or if pv magazine is legally obliged to do so.
You may revoke this consent at any time with effect for the future, in which case your personal data will be deleted immediately. Otherwise, your data will be deleted if pv magazine has processed your request or the purpose of data storage is fulfilled.
Further information on data privacy can be found in our Data Protection Policy.