Posted on 12/12/2011 1:04:26 PM PST by surroundedbyblue
China's major solar panel companies — whose low-cost products led some American factories to close, helped create the Solyndra controversy and spawned talk of a trade war — were bankrolled in the United States by the world's largest investment banks.
Goldman Sachs, Morgan Stanley, Citigroup, Lehman Brothers, Merrill Lynch, USB Investment Bank and others raised $6.5 billion for seven young Chinese solar panel makers in the mid-2000s by underwriting their securities on the New York Stock Exchange and Nasdaq, a Tribune-Review investigation has found.
Documents show the process involved two steps. First, the Chinese companies were folded into holding company shells in the Cayman Islands. That allowed them to take the next step, which was selling specialty securities called American Depository Shares on the exchanges.
Shares in the companies, initially darlings of Wall Street, have plummeted because of an oversupply of solar panels, leaving investors with few alternatives.
"If you're trying to get at assets that are in China, you're going to be screwed," said Thomas Shoesmith, a Silicon Valley attorney who establishes Cayman Island companies. "Any court decision in the U.S. is not enforceable in China."
Worse, said Washington attorney Herbert Milstein, once chief corporate enforcement attorney at the Securities and Exchange Commission, China's auditing rules are such that investors cannot always determine whether a company's books are legitimate.
He led a class-action lawsuit against one of the big Chinese solar companies, LDK Solar Co. Ltd., after a company controller blew the whistle on potential fraud. But Milstein said he could not access company records after LDK's audit firm, a Chinese branch of auditing giant KPMG, said Chinese law forbids it from disclosing internal documents.
(Excerpt) Read more at pittsburghlive.com ...
What exactly is the point of this article?
The thing about PV solar panels is that the energy output takes quite a while to make up for the energy used to manufacture the thing in the first place.
So, basically, the Greenies here in the USA are putting coal and nuclear charged batteries on their roof.
But Milstein said he could not access company records after LDK’s audit firm, a Chinese branch of auditing giant KPMG, said Chinese law forbids it from disclosing internal documents.
Just another example... If you invest in China, either directly in a Chinese company or in a factory to produce your products you risk losing it all. Foreigners keep forgetting that to the Chinese a foreign investor is just one they haven’t stolen everything from yet. Be it Intellectual property, real property or financial property. Nothing is safe with a Chinese partner when it’s located in China proper.
So how many stories like this are we going to read before Capital and Governments realize who they are dealing with... The Chinese Dragon is a polite and good host while he’s figuring out how best to eat you.
Don't invest in China. They'll lift your wallet as they're shaking hands with you.
It seems they have decided we are best basted and cooked slowly over a low fire.
I don't understand your question. Did you read the article? Do you know who Solyndra is? Do you know who the Wall Street players, Goldman-Sachs, etc., are? Do you know who and where China is? Do you remember what started our economic meltdown in 2008? Do you know what derivatives are? Do you know what false fronts are?
The point is the Chinese are rip off artists & the globalists in the banking industry enabled it.
You really have to ask this question??
Most people do not understand international capital flows, only their own paycheck and expenses.
These capital flows illustrate why China and the elites of big investing are creating the entire green movement out of nothing. People don’t realize that the green movement is from the top down, from big investment interests.
The big elites don’t understand that even though they are rich, they and their wealth are just useful tools to the Chinese power structure. Jim Rogers brags how his kids are learning Chinese. Dopes like him do not understand that the Chinese power structure would strip him of his assets just as soon as look at him.
The capital outflow is why there is very little capital being invested in American business, and that is keeping job creation down.
To the extent that's true, I think it's important to note that the lack of capital investment in America is the result of wise decision-making at the moment. I wouldn't, however, choose China as an alternative.
Yes - but that should be news to no one - only the silly or painfully naive.
Your screen name is an excellent description of your faculties.
Solyndra has nothing to do with this. As do few if any of the other topics you are blathering about.
Where did you say your MBA was from?
As you can see from the above posts - the article attracted a certain type of person.
Solyndra was public $. This article is about private $. Conservatives should know the difference.
The article concerns greedy whiners, and is targeted at the ignorant. The purpose of the investment, and the “creative” accounting behind it - would have been known to those attempting the greedy investment. Only now they want to play the little lambs. Just silly.
If you look at this article - and the blame shifting attempted - it is oddly similar to the real estate meltdown.
The only folks who lost $ here are those combining both greed and ignorance.
The Chinese built a plant, and anyone nominally interested knows their accounting is a sham. And the bankers made a mechanism for the greedy to invest in it.
The investors are responsible for themselves.
you’re right about public vs private $, tho solyandra was hybrid.
Fraud is suspected on the chinese part.Suntech’s stock prices are near junk status, investors losing almost everything, and the private $ companies mentioned (JP Morgan, Goldman etc) were bailed out with public $...stuff rolls down hill.
The part of Solyndra that was private is not an issue - people are free to make bad investments.
If this article were about public $ going to bail out investment banks for bad investments in Chinese solar panels - that would be completely different - and a completely different article and set of circumstances.
This article just exposes greed and hubris - not market or financial manipulation. Everybody knows you can’t trust Chinese accounting numbers.
Thank you.
Solyndra has nothing to do with this. As do few if any of the other topics you are blathering about.
I am sorry to hear that but I appreciate your pointing it out. It seemed to me, mind-numbed that I am, that the same gang of political cronies in government who were shoveling money to Solyndra, a company with no chance of success, and those on Wall Street were bundling derivatives of questionable value and hiding the true destination of the money invested. (China) Ironically, the China companies were competing with Solyndra in the solar panel business.
Isn't that a valid connection, the particular politicians and government functionaries and the Wall Street firms involved? Don't each at least have the players and the purpose in common? Weren't the same players involved in the economic meltdown concerning a mishmash of derivatives including mortgage backed securities with phony AAA ratings? Do you not see a similarity in that to the routing of the identities of these Chinese companies from China to the British West Indies, to the Cayman Islands and then to Wall Street? I would appreciate your guidance.
Where did you say your MBA was from?
I have no MBA. Isn't that obvious? You seem to think so. It seems equally obvious to me, by my name, which you so graciously pointed out, that I am programmed, not educated.
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