Deloitte abandons Chinese solar company SFCE because of going-concern fears

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Debt-saddled Chinese solar developer SFCE has lost its auditor, it announced to the Hong Kong Stock Exchange today.

A statement by the developer, which said Deloitte “confirmed that there are no matters that need to be brought to the attention of the shareholders of the company,” is unlikely to mollify investors given the reason cited for Deloitte’s resignation in today’s brief update.

SFCE said the London-based auditor had walked away, with effect from today “due to the professional risk associated with the multiple uncertainties [which] exist relating to [the] going concern of the [SFCE] group and the level of audit fees.”

The latest setback is another reminder of the mountain of debt piling up at SFCE, formerly known as Shunfeng International.

Last month, SFCE admitted it could not guarantee receipt of a more-than-60% slice of the monies expected from a fire sale of 140 MW of solar project capacity in Xinjiang. The company said it had been unable to structure the sale such that it could withdraw if the purchaser – the Zhejiang Zhengtai New Energy Development Co Ltd subsidiary of Zhejiang Chint Electronics – failed to pay the RMB288 million (US$41 million) owed by the solar project companies to SFCE on top of the RMB181 million asking price.

SFCE said Belgian-based BDO Limited would replace Deloitte as its auditor.

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