The financial struggles of Suntech Power Holdings, one of the world’s largest manufacturers of solar panels, deepened this week after the company disclosed a potential fraud that could cost the company more than $680 million, according to a Suntech press release.
Suntech provided loan guarantees for the Global Solar Fund, a solar development company. In return, $686 million in German government bonds were pledged as collateral for the loan guarantees. The company announced this week that the bonds may not exist and that it may be forced to make good on those guarantees. Already, the company must repay a $540 million debt that is due in March 2013.
“It has the highest level of attention from the company and the board,” said Suntech Chairman and CEO Zhengrong Shi. “There is no indication that management had any involvement.”
Suntech has filed claims seeking control of GSF and its assets.
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