The scandal surrounding the alleged misreporting of registered capital for two Chinese subsidiaries of PV developer China Solar has derailed the reporting of the embattled company’s six-month figures.
Under Hong Kong Stock Exchange rules, companies must produce their interim trading figures within two months of the end of the period in question.
But former solar success story China Solar today announced it will miss the cut-off date for its half-year figures to the end of September, and will instead aim to report them on or before the end of the year.
In a submission to the Hong Kong exchange today, China Solar admitted the delay was caused "because additional time is required for the company to complete and finalise certain information, including but not limited to, the investigation of certain PRC subsidiaries of the company, to be included in the interim results."
The investigation referred to has been prompted by the revelation, by the company on October 21, China Solar chairman Yeung Ngo was arrested by the authorities in Dali, China, on August 26 along with his son and China Solar executive director Yang Yuchun and non-executive director Hao Guojian.
The arrests were in connection with China Solar’s Dali and Changzhou subsidiaries, with the company admitting none of the US$49,460,000 of registered capital due to be paid by the Dali subsidiary by January 24, 2009, had ever materialized.
Dali assets seized
Of the US$99,980,000 of registered capital related to the Changzhou unit, due to be paid by June 23, 2010, only US$19,358,000 had been handed over with China Solar admitting the assets of its Dali operation established in January 2008 but which never started operations had been seized and the Changzhou unit was not operating due to the relocation of its production plant.
The Changzhou unit has not registered its annual reviews for 2010, 2011 or 2012 and has had its business registration revoked by the Chinese Administration for Industry and Commerce.
Since updating shareholders on November 1 that it had received notice Hao had been released on bail but it had not contacted any of the three who were suspended from duties pending the results of the investigation and it had no idea of the stage the investigation by the Dali authorities had reached, Bermuda-registered China Solar has made no further updates to the Stock Exchange.