BEIJING—A small solar-equipment manufacturer is the latest company in China to be swept up in a nationwide anticorruption drive.
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‘s executives were detained by Chinese authorities in August in connection with alleged “fraudulent acts” related to the assets of two Chinese subsidiaries, the company said in a filing with the Hong Kong Stock Exchange late Friday.
China Solar, which primarily makes solar cells, didn’t immediately respond to a request for comment.
The company requested that trading of its shares in Hong Kong be suspended on Aug. 16, pending an announcement, but until Friday, filings with the exchange it hadn’t provided any reasons for the share-trading suspension, which followed a 42% decline in China Solar’s share price since the start of the year. Trading in China Solar remains suspended.
Based on an internal investigation, China Solar said it never fully paid up the registered capital of two Chinese subsidiaries. Its unit in the city of Changzhou, Jiangsu province, about 200 kilometers from Shanghai, was required to hold about $100 million in registered capital by 2010, but instead held only $20 million, while its unit in the southwestern city of Dali, in Yunnan province, was required to hold about $50 million in registered capital by 2008 but instead held nothing. China Solar said that in Dali, local authorities have frozen its assets, and its records have been temporarily seized.
In China, companies with foreign investment must hold a minimum amount of registered capital, which can be a combination of cash and assets, to obtain financing and do business with other companies.
China Solar said in the filing that Chairman
his son and executive director Yang Yuchun and non-executive director Hao Guojun were arrested on Aug. 26. The company said the three executives have been incommunicado since then.
China Solar has factories in Changzhou and Dali that can produce enough solar panels a year to generate 240 megawatts and 420 megawatts of electricity, respectively, according to the company’s website. Besides making solar products and developing solar projects, it is also involved in the farming and sales of hogs and other livestock.
Chinese President Xi Jinping has pledged to clean up government and corporate ranks. Mr. Xi has said he will target both tigers and houseflies—or people in big and small roles—in the Communist Party’s battle against corruption.
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