'Sun King' detained in China Solar magnate may face prosecution over insolvency
Former solar billionaire and Australian citizen Shi Zhengrong is being investigated by Chinese authorities over financial dealings that may have contributed to the insolvency of his company, Suntech Power.
Chinese-language media report that immigration officials have been instructed to prevent Dr Shi from leaving China so that he can assist with the investigation.
"He's really in trouble this time," according to an official from Wuxi, where Suntech is based, the Zhengzhou Evening News reported on Saturday.
The Department of Foreign Affairs was yet to respond to questions about whether embassy or consular staff in China were in contact with Dr Shi. In recent years, Australia has been drawn into several criminal cases involving prominent business executives holding Australian passports, such as that of ex-Rio Tinto employee Stern Hu, now serving 10 years in jail for stealing commercial secrets.
Wuxi's court last week accepted Suntech's petition opening the way for the restructuring of its main unit, which employs 10,000 workers. The firm's US-listed arm defaulted on $US541 million ($518 million) earlier this month.
Dr Shi, who completed his doctorate in solar energy at the University of NSW before returning to China, was hailed as the "Sun King" and inspired local book titles such as The hero who chased the sun.
Suntech expanded rapidly to become the world's largest producer of solar photovoltaic panels in 2011. Last year, Dr Shi told media that Suntech supplied about 10 per cent of global PV, and was the "leading sheep" in a revolution that would transform the energy sector.
Suntech became the first solar energy company to list on the New York Stock Exchange, soaring to be worth $16 billion by late 2007, and valuing Dr Shi's stake at more than $3 billion.
Dr Shi was stripped of his title of chief executive last August and ousted as president earlier this month, complaining he was being locked out of meetings despite remaining the largest shareholder with a stake of at least 30 per cent.
His firm's early success prompted "every city to build a solar industrial park", China Securities News reported last week.
Apart from sending panel prices plummeting - wholesale costs have dropped 80 per cent in Australia in the past four years - the rush also set off a scramble for raw materials, pushing costs sharply higher.
The China Securities report said black market silicon prices jumped fourfold to $US400 per kilogram in 2007. Suntech reacted by locking in a 10-year supply worth $US7 billion with a foreign company, only to see the price crash to $20 per kilogram, undermining its competitiveness.
More damaging for Dr Shi's reputation, and potentially for his freedom from prosecution, are claims he signed a $1.5 billion long-term contract with a related company, Asia Silicon.