Suntech probes potential fraud

Jul 30, 2012 - Chinese solar products maker Suntech Power Holdings Co Ltd (NYSE:STP) said Monday it was investigating a potential fraud in relation to its investment in affiliate Global Solar Fund SCA Sicar (GSF).

Suntech said it could have fallen victim to fraud as EUR 560 million (USD 685m) of German government bonds pledged to it as security for its guarantee of finance facilities provided to an investee company of GSF might have not existed. The bonds were pledged by GSF Capital Pte Ltd, a third-party investor of GSF, which is a fund designed to invest in private companies owning or developing solar energy projects.

Suntech said facts pointing to a potential fraud had been noted recently by an outside counsel hired by the company to help it with its efforts to monetise its investment in GSF. It added it had lodged claims against relevant parties in a number of jurisdictions to assert control of GSF and its assets.

The Chinese company also said that it was evaluating the possible effect of the suspected fraud on its financial statements and that it could put off the release of its second-quarter earnings until the investigation and financial evaluations had been completed. It promised to announce key operation figures in the week starting on August 20.

(EUR 1.0 = USD 1.224)

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