GCL slapped on wrist for late reporting of Chaori Solar module deals

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Executive directors and other senior management at Chinese polysilicon producer GCL New Energy Holdings have been ordered to attend training courses on stock exchange listings compliance, after the company belatedly revealed details of module supply deals with bankrupt PV module manufacturer Shanghai Chaori Solar, for which GCL recently revealed a bail-out deal.

GCL, listed on the Hong Kong Stock Exchange, has now reported details of the recent deals for the benefit of its shareholders. In September, Chaori Solar made four deals to supply 255W, 300w, 305W and 310W modules to GCL. GCL admitted in its 66-page release – which also detailed transactions with Ningxia Jiangnan Construction and Xi’an Huanghe Photovoltaic and others as engineering, procurement and construction (EPC) contractors – that the deals with Chaori Solar constituted “major transactions”. GCL should have been reported these for shareholder approval, the company said.

According to GCL, the past transactions have been approved in writing by Elite Time Global, which holds over 62% of GCL’s available shares, meaning the company will not have to convene a general meeting of shareholders to seek retroactive approval for them. Remedial action will be taken however, with GCL directors, senior management and heads of GCL subsidiaries ordered to undergo re-training in listing rules to ensure compliance in future.

On 12 September, GCL bought RMB131,670,698.25 (US$21.48 million) worth of 310w and 305w modules, on 15 September a deal was struck for Chaori Solar to supply 300w modules in a deal worth RMB395 million, on 20 September, GCL bought 300w modules totalling 60,000,000 watts (200,000 modules) for RMB237 million. The fourth and final deal was the biggest, with RMB486.7 million worth of 300w and 255w modules changing hands. All modules were sold at RMB3.95 per watt.

PV Tech reported last week that GCL will take a majority holding in Chaori Solar, with a restructuring plan that was approved by the module maker’s creditors on 28 October.

There was a caveat regarding details of the restructuring plan, with GCL reminding shareholders that the deal may still be subject to certain conditions that have still to be met before the plan can go ahead.

Under the terms of the plan, Jiangsu Golden Concord, GCL’s parent company, could acquire a controlling interest of over 30% in Chaori Solar. Jiangsu Golden Concord’s major trustees including director Shu Yufeng and his family becoming major shareholders could mean Chaori Solar would become a “connected company” and therefore subject to a different set of rules under HKSE listing rule Chapter 14A. The rule aims to “ensure that the interests of shareholders as a whole are taken into account by the listed issuer when the listed issuer’s group enters into a connected transaction”.

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