Solar panel maker settles with over China transfer

Reuters News
Posted: Sep 06, 2012 4:10 PM
Solar panel maker settles with over China transfer

WASHINGTON (Reuters) - Solar panel manufacturer Worldwide Energy Manufacturing USA Inc on Thursday agreed to resolve charges from securities regulators that it concealed an agreement to transfer part of its ownership stake in its Chinese subsidiary.

The company raised nearly $9 million from U.S. investors in 2010 to expand its China solar unit without revealing plans to transfer a 49 percent equity stake in the unit to three of its managers in China, the U.S. Securities and Exchange Commission said.

Worldwide agreed to pay a $100,000 penalty without admitting wrongdoing, the SEC said.

A lawyer for the company, Paul Wood, declined to comment.

The Chinese unit represented the bulk of Worldwide's operations and generated 77 percent of its revenues in 2009, the SEC said. As the company tried to raise money in 2010, founder Jimmy Wang and President Jeffrey Watson told investors it fully owned the unit, the SEC said.

But Wang, who was chairman, had already signed agreements to transfer 49 percent of the equity to its Chinese solar managers, the SEC said.

Worldwide filed false and misleading quarterly reports in 2009 and 2010 because it failed to disclose the agreements, the SEC said. The agency also charged Wang and his wife Mindy, who was vice president, and Watson with securities fraud.

Mindy Wang and Watson agreed to pay $50,000 each in penalties, the SEC said. Jimmy Wang entered into a cooperation agreement with the agency and assisted in the investigation.

The Wangs were removed from Worldwide's board in 2011, while Watson left in June. All three are barred from serving as officers or directors at public companies.

Lawyers for the Wangs and Watson did not immediately respond to requests for comment.

(Reporting by Aruna Viswanatha in Washington and Jonathan Stempel in New York; Editing by Gary Hill and Richard Chang)