Perhaps the most eye-catching aspect of panel maker China Solar’s revelation of the arrest of its chairman and two directors is the statement: "The board confirms that the company is not able to contact the relevant directors since around August 2013," in a line more resonant of a Cold War spy thriller than a company report.
The ‘relevant directors’ in question are chairman Yeung Ngo, his son and executive director Yang Yuchun and non-executive director Hao Guojun, whom, the company revealed to the Hong Kong Stock Exchange on Friday, were arrested in the People’s Republic on August 26.
The trio were arrested ‘and detained’ by the Public Security Bureau of Dali on suspicion of involvement in the false reporting of registered capital related to two China Solar subsidiaries.
The Dali subsidiary of China solar was established in January 2008 and has paid over none of the registered capital of US$49,460,000 which was due to be paid by January 24, 2009.
The China Solar board confirmed to the Hong Kong stock exchange that the five-and-a-half-year-old subsidiary has not started operating yet and all of the wholly-owned company’s assets property, factory buildings, facilities and vehicles have been frozen.
Changzhou subsid registration revoked
A separate subsidiary of the Bermuda-registered China Solar, the Changzhou unit, has had its business registration revoked by the Changzhou Administration for Industry and Commerce, having paid only $19,358,000 of the $99,980,000 registered capital of the unit, with the remaining $80 million due since June 23, 2010.
Both subsidiaries could be hit with penalties and have their foreign investment enterprise certificates and business licences revoked.
The Changzhou unit’s annual reviews for 2010, 2011 and 2012 have not been passed and the China Power board said the subsidiary is not operating at present as its production plant is being relocated.
The three directors have been suspended from duties pending the results of the investigation which is probably the least of their worries as they remain persona non grata.
The China Power statement also confirmed dealing in the company’s battered shares which, according to Bloomberg value a company once worth HK$3.7 billion at HK$277 million will remain suspended until further notice.