* Parent Hanergy Holding pays down 1.5 bln yuan of overdue
* Founder Li pledges shares as guarantee on HK$3.2 bln of
* Auditor issues "qualified opinion" on 2016 results
(Adds details on share suspension, court proceeding and 2016
By Elzio Barreto
HONG KONG, March 31 Hanergy Thin Film Power
Group, the solar panel maker being investigated by
Hong Kong's securities regulator, said its parent had paid down
some overdue debt, part of a push to end an almost two-year
share trading suspension.
Parent Hanergy Holding paid 1.5 billion yuan ($218 million)
in overdue trade receivables on March 10, reducing the overdue
amount owed to about HK$3.2 billion ($412 million), Hanergy said
in a securities filing late on Thursday.
Founder and former Chairman Li Hejun also signed a "deed of
guarantee" committing to pay the remainder of the funds over a
period of two years after shares in Hanergy resume trading. Li
pledged 1.4 billion Hanergy shares as collateral on the payment
Hanergy has been engulfed in controversy since it asked the
Hong Kong stock exchange to suspend trading in its shares on May
20, 2015, after the company lost half its $40 billion market
value in just 24 minutes. Eight days later, Hong Kong's
Securities and Futures Commission (SFC) said it was
investigating Hanergy's "affairs" and subsequently directed the
bourse to extend the suspension indefinitely.
The regulator has set two requirements to allow trading to
resume: one that Li and four Hanergy directors "not contest
liability" and court orders barring them from managing any
corporations in the city, and another for Hanergy to release
detailed information about its finances.
Li and the four directors said in January they would not
contest the SFC's suit, while Hanergy also reiterated it was
working on the disclosure document detailing information on its
business, financial performance and prospects to address the
The company said in the filing it posted HK$251.6 million of
profits in 2016, reversing a HK$12.2 billion loss in 2015 that
was weighed down by a plunge in revenue and HK$9.7 billion in
goodwill impairments after it failed to deliver a production
line to its parent and controlling shareholder.
The company had HK$248.7 million in cash and equivalents at
the end of 2016. It also had HK$6.8 billion worth of trade
receivables, with HK$3.9 billion of those owed by its parent
Hanergy Holding and other affiliates and the vast majority more
than one year past due, according to the filing.
Hanergy's auditor, Ernst & Young, issued a so-called
"qualified opinion" on the 2016 results, because it was "unable
to obtain sufficient appropriate audit evidence about the
recoverability of the group's remaining trade receivables and
gross amount due from contract customers" worth about HK$6.2
billion, the company said.
Auditors typically issue a qualified opinion when they
believe the financial information is not complete.
($1 = 7.7697 Hong Kong dollars)
($1 = 6.8970 Chinese yuan renminbi)
(Reporting by Elzio Barreto; Editing by Edwina Gibbs and