Li Hejun chairman of Hong Kong-listed Hanergy Thin Film Power, a maker of
equipment for the solar power industry, just saw $14 billion wiped off
the value of his controlling stake in the company in a so-far
unexplained end-of-day crash.
Li had become one of China’s richest men on paper after shares in his
company nearly tripled in the first four months of the year, giving it a
market capitalization of $40 billion at one stage. For comparison, the
U.S.’s largest solar company, First Solar Inc. [fortune-stock
symbol=”FSLR”], is worth $5.6 billion. But the company’s shares fell
over 42% in the last half-hour of trading in Hong Kong Wednesday, before
being suspended by the local market regulator.
The boom in Hanergy’s shares has raised eyebrows. Transparency about
the company’s business practices is limited by the fact that most of its
sales go to a single company–its parent, the privately-held Hanergy
Group. That has fostered suspicions–denied by the company–that it may be
overstating its financial strength.
The collapse appeared to be triggered by Li’s failure to attend the
company’s annual shareholder meeting. In one of the more memorable
corporate quotes of recent times, The Financial Times reported a company spokesman as saying that Li “had something to do” instead.
Sentiment towards China’s solar companies had been battered on
Tuesday after one of Hanergy’s biggest rivals, New York-listed Yingli
Green Energy Holding [fortune-stock symbol=”YGE”] said in its annual
report that there was “substantial doubt” as to its ability to continue
as a going concern, driving its shares down 37%. The company put out a
statement Wednesday saying that the media had blown its comments out of
proportion.
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