GCL auditor resigns over silicon project pre-payment probe

Share

Chinese polysilicon manufacturer GCL today announced its auditor, Deloitte Touche Tohmatsu, has resigned after failing to agree the scope of a planned investigation into a RMB510 million (US$79.2 million) pre-payment made by the company in 2019, for a silicon project which was never constructed.

London based Deloitte, which had held up publication of GCL's 2020 annual figures over the payment made in September 2019, on Friday resigned from its position, GCL told the Hong Kong Stock Exchange today.

Having questioned the commercial rationale of the pre-payment when it first raised the issue – including after conducting on-site interviews – Deloitte recommended an independent accountant be appointed to carry out a forensic investigation into the payment, which GCL said it recouped RMB495 million (US$76.8 million) of last month, minus the unnamed contractor's expenses.

GCL, whose shares have been suspended from trading since the end of March as a result of the matter, opened an internal investigation into the issue and subsequently followed Deloitte's advice by appointing a Shanghai-based firm which is part of the Mazars global grouping, to look into the payment.

The manufacturer last week said the independent investigator would also look at whether the payment was made between “related parties.”

However, Deloitte tendered its resignation on Friday, according to GCL, which today added: “Deloitte and the company are unable to reach a consensus on the scope of [the] independent forensic investigation.”

GCL said Hong Kong-based Crowe (HK) CPA Ltd has been appointed to replace Deloitte as auditor on a temporary basis, subject to audit engagement acceptance procedures.

The heavily-indebted poly manufacturer and solar project developer failed to settle a US$500 million senior note at the end of January, retroactively triggering a cross default of other liabilities from the end of 2020. Plans to reissue the senior notes in question are progressing through the court system of Bermuda, where the company is registered for tax reasons.

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.

Popular content

German authorities arrest Solar Fabrik CEO
18 July 2024 The German police have arrested Christian Laibacher, the CEO of German solar manufacturer Solarfabrik, in relation to an investigation by the Würzburg...