Cohen Milstein Sellers & Toll PLLC is conducting an investigation to determine whether Suntech Power Holdings Co., Ltd. (“Suntech” or the “Company”) and certain of its officers and directors made false and misleading statements and/or omissions in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
Class action lawsuits were filed in the U.S. District Courts for the Central and Northern Districts of California by other law firms on behalf of purchasers of the common stock of Suntech Power Holdings Co., Ltd. (NYSE: STP) between August 18, 2010 and July 30, 2012, inclusive (the “Class Period”).
The complaints allege that Defendants misrepresented and/or failed to disclose that: (1) Suntech had not been pledged €560 million in German government bonds from GSF Capital Pte Ltd. (“GSF Capital”), in connection with its May 2010 financing arrangement with the China Development Bank (“CDB”); (2) Suntech lacked internal and financial controls; and (3) as a result, the Company's financial statements were materially false and misleading.
In 2008 Suntech entered into a commitment to invest in Global Solar Fund, S.C.A., Sicar (“GSF”), an investment fund purportedly created to make investments in private companies that own or develop projects in the solar energy sector. GSF is managed by Global Solar Fund Partners S.á.r.l. (“GSF Partners”), the company’s general partner. In exchange for Suntech’s commitment to invest €258 million in GSF, Suntech received an 86% stake in the company. As of December 31, 2011, Suntech had contributed a total of €155.7 million to GSF.
In May 2010, Suntech entered into an arrangement in which it guaranteed payment obligations under finance facilities provided by CDB to Solar Puglia II, S.r.l., an investee company of GSF, amounting to approximately €554.2 million (US $690 million). When Suntech disclosed the guarantee it also reported:
“As security for our obligations under the guarantee, we received a pledge of €560.0 million in German government bonds from GSF Capital Pte Ltd., the parent of the general partner of GSF [GSF Partners].”
On July 30, 2012 Suntech warned investors that it
“may have been the victim of fraud,”
in connection with the German government bond guarantee. Specifically the Company reported that:
. . . the Company is conducting an investigation into a security interest Suntech received in connection with its investment in Global Solar Fund...Based on recent review and inquiries, Suntech suspects that the collateral related to the security interest may not have existed and the Company may have been a victim of fraud.
During a brief July 30 conference call to discuss the matter, one defendant stated: