Now Fraud Brings Pain to Solar
Suntech Power Holdings Co. Ltd. (NYSE: STP) sounds doomed. The damage sets a sour tone for the week’s solar lineup as First Solar Inc. (NASDAQ: FSLR) is set to report earnings this week. Suntech said that it is investigating security…
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Based on recent reviews and inquiries, Suntech now says that it suspects that the collateral related to the security interest may never have existed. In short, the company may have been a victim of a serious fraud.
Suntech guaranteed payment obligations related to finance facilities provided to an investee company of GSF back in May of 2010 in the amount of over 550 million euros. As security for the company’s obligations under the guarantee, Suntech received a pledge of German government bonds in the amount of 560.0 million euros from GSF Capital, which was a third-party investor of GSF.
Suntech said, “While we continue to investigate and take actions to resolve this matter, Suntech’s daily operations will not be impacted.” Still shares are down 14% at $1.35 in the premarket against a prior 52-week range of $1.50 to $7.77.
Solar companies already are having a hard time of things. Fraud in investments is just one more fly in the ointment.
JON C. OGG
Contact [email protected] for any questions or corrections.
Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.