Continuing turmoil at solar firm having wider impact on markets
The Hong Kong Securities and Futures Commission (SFC) on Wednesday asked the city's exchange to suspend all dealings in the shares of Hanergy Thin Film Power Group Ltd effective immediately.
Hanergy, a solar-power technology manufacturer based in the Chinese mainland, is under investigation by the SFC after a stock price crash on May 20 that saw the company's market value of nearly $40 billion slashed in half in just 24 minutes of trading.
The SFC announced an investigation into Hanergy on May 28.
Starting early this year, Hanergy's shares surged more than 310 percent, giving the company the biggest market capitalization among thin-film solar power companies worldwide.
The gain also made Li Hejun, chairman of Beijing-based Hanergy's parent Hanergy Holding Group and holder of more than 50 percent of the shares, the richest man in China at one point.
"The high concentration of share ownership in the hands of Li Hejun and his partners is one of the reasons for the volatile performance of Hanergy shares," Yuan Xiong, an analyst with CITIC Securities, told the Global Times Wednesday.
Yuan noted that the SFC's decision is case-specific and will not affect valuations of other companies in the new-energy sector.
In a statement on Wednesday, the Hong Kong bourse said the SFC had intervened under a rarely used provision that precedents show can lead to stocks being suspended for years or delisted.
The company requested a suspension of its shares immediately after the plunge, and the shares have not traded since. The move by the SFC on Wednesday was its first involving Hanergy.
The day after the crash, the company said in an announcement to the Hong Kong exchange that it was operating normally and had no overdue loans.
It also said its shareholders and affiliated persons had not sold any of their shares on May 20.
The Hong Kong bourse then asked Hanergy to provide the accounts of its parent company. Reuters reported on June 24 Hanergy had refused to provide the figures.
A senior manager of Hanergy told the Global Times on condition of anonymity Wednesday that he was not aware of any such request by the exchange.
Hanergy's public relations representative told the Global Times that the company has no new announcement to make beyond the one filed to the Hong Kong exchange on May 21. There have been other negative developments involving Hanergy. On June 15, Fujian Apollo, a Hanergy subsidiary, canceled a $585 million deal with Hanergy Holding Group for equipment and technical services, according to a company filing.
The order was signed in May, and under the terms of the deal, Fujian Apollo was to sell and provide technical services to Hanergy Holding on a solar energy panel module assembly line.
The ongoing turmoil involving Hanergy has begun to have a wider impact on the capital markets.
Bank of Jinzhou, a city commercial lender based in Northeast China's Liao-ning Province, had to delay its IPO after the Hong Kong bourse questioned a $1.3 billion credit line the lender granted to Hanergy Holding Group, according to a report by IFR, a Thomson Reuters publication, on June 19.
