Li Hejun, the founder of Chinese solar energy giant Hanergy Thin Film Power Group, was taken away by police in northeast China’s Liaoning Province on December 17, according to Caixin, a major Chinese financial news portal.
Caixin said on January 11 that Li had been detained by police to “assist investigators” and had not been seen at the time of the report.
According to China’s state-run financial portal Securities Times, Li’s arrest may be related to a loan from Jinzhou Bank, a city commercial bank in Liaoning province, to Hanergy Group.
The loan balance was 9.461 billion yuan (about $1.396 billion), and the net credit risk was 2.77 billion yuan (about $408.8 million) in 2015. Hong Kong Stock Exchange in 2015.
A former Hanergy employee claimed that Li and the company still owe him and 190 other employees about 3 million yuan ($443,000) in wages and compensation. An employee told the Chinese-language publication The Epoch Times on January 11 that Li and his family were arrested by Jinzhou police at Jinzhou Airport. The employee wished to remain anonymous for security reasons.
Multiple calls made by the Epoch Times to the Jinzhou Police Bureau on January 11 were not answered.
The Epoch Times could not verify the authenticity of the claim.
Rise to riches
According to Rupert Hoogewerf, founder of Hurun Report, a leading Chinese wealth research firm, Li was China’s richest man in the first half of 2015, with a fortune of about $26 billion.
According to Hanergy’s official website, Li was born in 1967 in the small city of Heyuan in southern China’s Guangdong province and started his business empire in 1989 with 50,000 yuan ($7,380) borrowed from his teacher.
Reports from multiple Chinese media portals said Li made his first pot of gold by investing in hydropower plants, including the Jin’anqiao Hydropower Plant on the Jinsha River in southwest China’s Yunnan Province – the largest privately-backed hydropower plant in China. The hydropower plant became Li’s cash cow once it was up and running, on top of several other smaller plants in various parts of China.
Water flows through the gate of the Shuikou Hydroelectric Power Station in southeast China’s Fujian province on June 13, 2022. (AP via Lin Shanchuan/Xinhua)
With strong cash flow, Lee expanded into the solar market in 2009 and grew quickly — perhaps too quickly. It then had to look for different capital channels to grow, such as a $1.396 billion bank loan under the name of “beneficial interest transfer plans” issued by Jinzhou Bank.
In 2012, Li acquired Solibro, a thin-film solar energy company, from Germany’s QCells and US-based Miasole, and in 2013, Global Solar Energy, Inc., a leading Tucson-based copper indium gallium diselenide (CIGS) solar energy company. bought it. Arizona. In 2014, Lee acquired Alta Devices Inc., a California-based thin-film solar cell maker.
A wonderful autumn
Lee met Waterloo in Hong Kong.
The Hong Kong Securities and Futures Commission (SFC) began investigating Hanergy Thin Film Power Group, a Hong Kong-listed subsidiary of Hanergy Group Holdings, in 2015 for market manipulation. Hanergy’s shares fell nearly 50 percent on May 20, 2015, after which the company ceased trading. Lee lost $19 billion in one day due to falling stock prices.
Four years later, in 2019, Hanergy was delisted from the Hong Kong Stock Exchange.
Li was disqualified by a Hong Kong court in 2017 from running any corporation in Hong Kong for an eight-year period over an undisclosed loan to Hanergy Holding, an unlisted parent company in China, which amounted to a “clear conflict of interest”. This was reported by the Financial Times in London.
Since 2019, Hanergy has reportedly been dealing with wage arrears and loan defaults, including to Jinzhou Bank.
Li’s experience is similar to that of Xu Jiayin, the founder of China’s real estate giant Evergrande, whose humble beginnings and rapid expansion, thanks to the support of local governments, led to the breaking of the capital chain and the collapse of a business empire.
In 2022, more than 80 domestically listed Chinese companies were investigated by China’s stock market watchdog for violations of information disclosure, short trading, insider trading and market manipulation, according to China Economy, a state-run economy website.
By the time of publication, no formal charges had been filed against Li by Jinzhou police.
The Epoch Times reached out to Hanergy for comment by email on Jan. 11, but letters sent to Hanergy were declined.
Li Jing, Gu Xiaohua and Reuters contributed to this report.
Sophia Lam joined The Epoch Times in 2021 and covers China-related topics.