Former LDK Solar Co. Employee Blows Whistle On “Inconsistent” Finances
The major finance and business media missed this, but it’s big all the same. Ethisphere has learned that several days ago a former financial staff member of the Chinese company, LDK Solar Co. Ltd, has sent letters to company management alleging that he was terminated last month as financial controller because he uncovered financial inconsistencies. Why is this important? Because LDK Solar is one of the very few Chinese companies that trades on the NYSE, and thereby is subject to Sarbanes-Oxley and those pesky CEO/CFO Section 302 Certifications.
According to one report, LDK’s stock dropped by a quarter immediately after the accusations became public. Morgan Stanley, the company that underwrote LDK’s IPO, sent out something of a press release to inquiring minds:
“The CFO also thought that [the whistleblower, Charlie Situ] might have incorrectly classified scrap silicon as unusable raw material, whereas in fact scrap silicon accounts for more than 80 percent of the raw material needs at LDK.”
Since the announcement, LDK Solar has been downgraded by more than one financial firm.
Print This Post