China Solar Company Suntech Hit by 680M German Bond Fraud
Created: 2012-07-31 15:52 EST
One of China's biggest solar power companies said on Monday it's been the victim of massive fraud.
It's called Suntech Power Holdings, based in Wuxi, China. Its German affiliate--Global Solar Fund--had claimed it bought more than 680 million dollars worth of German government bonds as loan collateral. But later, Suntech discovered that the bonds probably never existed. This means Suntech could be liable for a 680 million-dollar guarantee--in addition to the 2.3 billion in debt it already owes on other loans.
Suntech's share price fell 27 percent on the New York Stock Exchange since Monday.
The issue has rung even more alarm bells about financial irregularities among Chinese companies in the US. Several others are already facing heavy scrutiny from the SEC.