Li Hejun, founder of troubled thin film solar firm Hanergy, has resigned as the head of his listed company one year after a dramatic plunge in the stock’s value triggered a trading halt.
A precipitous rise in Hanergy Thin Film Power stock on the Hong Kong exchange made Mr Li’s China’s richest man for a brief period in 2015. But the stock’s unusual trading patterns and related transactions also attracted the attention of short sellers who bet that it would be unable to sustain its climb.
On May 20, 2015, the stock plunged by 47 percent in half an hour and wiped out $19bn in value. The exchange’s trading halt is still in effect, trapping any short sellers who were unable to close their positions. Following the debacle, leading index provider MSCI changed its rules to filter companies, like Hanergy, that the Hong Kong regulator had flagged for over-concentration of shareholding.
Exactly one year later, Hanergy said Mr Li had resigned as chairman of the board and executive director of the listed company “for the reason of strengthening corporate governance” following the annual board meeting on Friday. His right-hand man, Frank Dai Mingfang, also resigned, “for the reason of focusing on other business development.”
In the year since the stock trading halt, Mr Li has remained a conspicuous promoter of thin film solar power, the light-weight technology that Hanergy embraced despite its lower efficiency ratios than other solar power panels. Hanergy most recently announced a press conference on solar powered cars for early June, then abruptly rescheduled it to July “to avoid disrupting the national college entrance exams.”
He has also engaged in an angry battle with the Hong Kong exchange to resume trading. Meanwhile, Hanergy has announced the disintegration of complicated stock for loan deals Mr Li sealed with companies including MacroLink, a private property company that is also the world’s largest producer of refrigerants, and Baota, a “teapot” refinery and petrochemical producer in the western deserts.
Hanergy’s woes have touched a number of Chinese banks, notably Bank of Jinzhou which listed in Hong Kong last year. Other Chinese financial institutions that have lent to Hanergy have never revealed the extent of their exposure.
Mr Li’s successor as head of the listed company, Yuan Yabin, provides a reminder of the political connections the company enjoys. Mr Yuan formerly worked in the national committee of the Chinese People’s Political Consultative Conference, an advisory body to the Chinese government and ruling Communist Party. Mr Li is a representative to the CPPCC.
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