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An independent investigation dismisses a fired controller's claims of an inventory gap at LDK Solar.
Stephen Taub, CFO.com | US
December 17, 2007
A Chinese maker of solar wafers that trades on the New York Stock Exchange said an investigation of an alleged inventory irregularity found no material errors.
LDK Solar Co., which has an office in Sunnyvale, Calif., said charges of a discrepancy in its silicon feedstock inventory were incorrect because the whistle-blower, former financial controller Charley Situ, had not taken into account all locations where the materials were stored.
LDK's surged about 20 percent on the news, pushing its market capitalization above $7 billion.
The probe was conduct by the two outside directors on LDK's audit committee, Louis Hsieh and Bing Xiang; independent counsel Simpson Thacher & Bartlett; a Big Four accounting firm that was not the company's external auditor; and independent experts on the evaluation of silicon feedstock the production of solar cells.
The company announced in October that Situ, who was terminated for cause on September 25, later sent e-mails to LDK's management and others alleging inconsistencies in LDK's inventory reporting.