FACTBOX-Solar firms hit by accounting controversies, lawsuits

HONG KONG, July 12 (BestGrowthStock) – Chinese solar-cell maker
Canadian Solar Inc (CSIQ.O: ) received a subpoena from the U.S.
Securities and Exchange Commission in June seeking documents
relating to sales in 2009, the latest in a string of cases
involving accounting irregularities from solar companies.

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Solar firms hit by accounting concerns and similar
controversies:

AKEENA SOLAR (AKNS.O: )

U.S. law firms have commenced an investigation on the
company’s officials for possible breaches of fiduciary duty in
connection with Akeena’s sales and significant credit-line
increase announced in 2007.

The California-based solar power system installer announced
a $17.5 million credit-line increase in 2007 which helped
bolster shares, only to disclose a year later that the credit
line involved a cash collateralization agreement, which simply
increased the company’s restricted cash.

The complaint also alleged that the company inflated its
reported sales backlog by including every new installation
contract, regardless of the customer’s financing. Akeena had
previously said the “backlog,” comprised contracts for
customers intending to take delivery within six months.

CANADIAN SOLAR

Lawsuits were filed against the company after it said it
received a subpoena from the SEC relating to certain 2009 sales
transactions. The complaints alleged the company and its
officials gave false information that made its financial
statements materially misleading.

Canadian Solar’s board is conducting its own investigation
of the issue.

LDK SOLAR (LDK.N: )

After more than two years of litigation, the Chinese wafer
solar company in February said it will pay $16 million to
settle a class action lawsuit, in which investors claimed the
company commited securities fraud by inflating the value of its
raw material inventory and understating the costs of
production.

In 2007, the company’s former financial controller resigned
after stating that LDK lacked internal controls and the
company’s reported inventory was overstated. Shares suffered
losses after the official’s revelation, which triggered class
action lawsuits.

JA SOLAR (JAS.O: )

The Chinese cell maker was hit by lawsuits in connection
with its purchase in July 2008 of a three-month $100 million
note from Lehman Treasury, a Netherlands-based affiliate of
Lehman Brothers. The complaint alleged the company failed to
disclose details of its purchase and gave misleading statements
in connection to the note.

The company recorded an impairment charge for the value of
the note in November.

SUNPOWER (SPWRA.O: )

The solar power system installer had to restate prior
financial statements after its audit committee found that there
were unsubstantiated accounting entries made relating to cost
of goods sold in the company’s Philippines operations.

U.S. law firms filed lawsuits on behalf of shareholders
claiming company officials overstated financial results because
of the unsubstantiated entries and that its financial
statements for the period of April 17, 2008 through November 16
2009 were false and misleading. (Source: Shareholders
Foundation Inc; Company announcements) ((Compiled by Leonora
Walet; Editing by Valerie Lee))

FACTBOX-Solar firms hit by accounting controversies, lawsuits