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
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