The astonishing oversight which appears set to cost Chinese solar developer Panda Green a thumping RMB1,022 million (US$144 million) – and which was highlighted by pv magazine last month – will see the company auditor refuse to sign off the 2019 accounts by the deadline stipulated by the Hong Kong exchange where the company is listed.
The bailed-out solar developer today announced its auditor had confirmed on Sunday it would not sign off the 2019 accounts or annual report in time for Friday’s deadline because of the board’s intended RMB1.02 billion impairment write-down for apparently non-recoverable solar development rights deposits.
pv magazine reported three weeks ago the figure had been included among a planned RMB4 billion of impairments included in the unaudited 2019 accounts issued by Panda Green at the end of March.
The figure related to money paid to unidentified third-party energy companies in 2017 to secure potential solar project development rights. When the solar projects in question never materialized, Panda Green claims, it issued legal letters to attempt to reclaim the monies but was forced to admit in the accounts: “Management of the group was uncertain about the progress of the projects’ acquisitions or the ability of refund from these parties should the relevant projects cannot [sic] go ahead.” The unaudited accounts added: “Management of the group was not optimistic for the recovery and the group has recognized an impairment charge on investment deposits of approximately RMB1,022 million during the year.”
Panda Green, which was bailed out by state-owned Beijing Energy Group in February, this morning announced it would set up an investigation committee comprised of independent non-executive directors to look into the matter of the deposits.
The revelation has come just a day after Panda Green admitted it had fallen below the minimum level of its stock which the Hong Kong exchange requires is held in public hands. The exchange requires at least 25% of the stock in member companies to be publicly held. The proportion of shares in Panda Green held by independent investors fell to 24.15% on Tuesday, the company said, after Snow Hill Developments Ltd – acting in concert with state-owned investor China Merchants New Energy Group Ltd – purchased 1.2% of the company stock.