Three Suntech directors quit, say firm has no plan
Suntech Power, the Chinese solar manufacturer whose main unit was pulled into bankruptcy earlier this year, said three directors, including the former chairwoman, quit. The departing directors said the company had no business plan.
Susan Wang, Julian Worley and Zhizhong Qiu resigned on August 21, saying they were not provided with information they needed to fulfil their responsibilities, the Wuxi-based company said yesterday in a statement. Michael Nacson replaced Wang, who took the post of chairwoman in March, Suntech said.
The resignations highlight the divisions among the company's management after a US$541 million bond default and follow the ousting of Suntech founder Shi Zhengrong less than six months ago. The mainland's solar-panel industry, which supplies more than half the world market, is unprofitable amid a global glut.
Shares of Suntech, once the world's biggest panel maker by shipments, fell 7.3 per cent on Wednesday in New York. The shares have lost 34 per cent this year, battered by insolvency proceedings against its biggest unit, Wuxi Suntech Power. The former directors cited concern about negotiations with bondholders, cash flow and a lack of clear business plan, Suntech said in the statement. They were also concerned about the potential erosion of internal controls and the impairment of employees' ability to function effectively.
The concerns are "demonstrative of disharmony and issues of communication between the executive management and the resigning directors that decreased the efficiency of the board's decision-making process," the remaining independent directors Philip Fan, Nacson and Kurt Metzger, said in the statement. Suntech's bondholders appointed Nacson to the board last month.
Suntech's biggest unit was forced into bankruptcy in March after the company missed a debt repayment, opening the way for bondholders to sue the company in the US, where its shares and bonds trade. Suntech extended a forbearance agreement with a majority of bondholders until August 30, the firm said in June.
"The large size and geographic dispersion of the board as previously constituted was not ideal for the company involved in a debt restructuring process because of the need for frequent in-person board meetings to discuss and analyse complex issues," Fan, Nacson and Metzger said in the statement. They see progress being made in regards to the issues raised by the resigning directors.