Article

China securities regulator probes Sinovel Wind Group

Sinovel's shares on Monday fell 9.9% to 3.54 yuan (about 59 U.S. cents) on the Shanghai Stock Exchange. The company's shares have fallen 41% since it disclosed accounting irregularities in March. Sinovel said in March that it overstated its revenue by 10% and profits by 20% in 2011—its first year as a public company. Sinovel attributed the error to revenue it wasn't supposed to recognize for uncompleted projects.

BEIJING— Sinovel Wind Group Co., China's onetime wind-power champion, signaled renewed scrutiny by Chinese regulators into its accounting problems in a filing to the Shanghai Stock Exchange late Sunday.

In the filing, Sinovel said it received a notice of an investigation from the China Securities Regulatory commission, adding to challenges that also include U.S. criminal charges and weak demand for wind turbines.

Sinovel didn't specify the reason for the probe or any details on its alleged violations in the filing, though the company said it would "actively cooperate" with the latest investigation.

A Sinovel representative declined to comment further.

Sinovel's announcement has stoked investors' concerns that Chinese authorities are still actively probing the company. Sinovel issued a similar announcement in May and since then hasn't commented publicly on that investigation. It wasn't immediately clear whether the latest statement reflects a shift in that probe.

Sinovel's shares on Monday fell 9.9% to 3.54 yuan (about 59 U.S. cents) on the Shanghai Stock Exchange. The company's shares have fallen 41% since it disclosed accounting irregularities in March.

Sinovel said in March that it overstated its revenue by 10% and profits by 20% in 2011—its first year as a public company. Sinovel attributed the error to revenue it wasn't supposed to recognize for uncompleted projects. After the disclosure, Sinovel's founder Han Junliang resigned as chairman but remained on the board of directors. Mr. Han has been absent from Sinovel's board meetings since October due to health reasons, according to company statements. He couldn't be reached for comment.

Since the accounting disclosures, Sinovel has said it appointed a longtime official with its financial-planning department to the new post of chief auditor and announced new rules and procedures to prevent future errors.

Sinovel was once the world's second-largest supplier of wind turbines but today is struggling to stay ranked among the world's top 10 due to manufacturing overcapacity and weaker demand for wind turbines in China.

The company said last week that it would record a net loss for a second consecutive year. Sinovel said its net loss in the first three quarters of 2013 would be 699 million yuan and that it expected a net loss in the fourth quarter as well. The company's net loss in 2012 was 583 million yuan. The company added that it was deciding whether to suspend trading of some of its corporate bonds.

In June, the U.S. Justice Department alleged that Sinovel and two former employees stole source code used to control wind turbines from Massachusetts-based engineering firm AMSC and then shipped four turbines equipped with the code to customers in the U.S. Sinovel said last week that it was unable to assess the financial impact of its various legal disputes, which include several civil lawsuits filed by AMSC.


Source: http://online.wsj.com/news/...

JAN 13 2014
http://www.windaction.org/posts/39485-china-securities-regulator-probes-sinovel-wind-group
back to top