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Business/Finance See other Business/Finance Articles Title: Is energy tycoon Li Hejun really the richest man in China? Want... Li Hejun gives a speech calling for improvement in China's solar energy infrastrucure at the third plenary meeting of Fifth Session of 11th CPPCC at the Great Hall of People in Beijing on March 10, 2012. (Photo/Xinhua) Li Hejun, the CEO of solar panel producer Hanergy, has surpassed Jack Ma, Alibaba Group's founder to become the richest man in China after his company's share prices surged, reports the financial news website of Hong Kong-based Ta Kung Po. Li's business practices and the source of his wealth are the subject of a lot of speculation, the report said. Although Hanergy's share price was only valued at 1.45 yuan (US$0.20) on Sept. 19 last year when Alibaba group listed in New York and made Ma the richest man in Asia, the share price since surged to 3.6 yuan (US$0.5) as of Jan. 28 and boosted Li's net worth to over 200 billion yuan (US$32 billion). Ma's net worth, meanwhile, dropped to US$19.5 billion on the same day after Alibaba's share price plunged 3% five minutes after the stock market opened. Hanergy's CEO started his business empire with a small hydroelectricity station on the banks of the Dong River, in which he invested 10 million yuan (US$1.6 million). The Chinese government offered 0% income tax and value-added tax exemptions to all small hydroelectricity stations in order to break the monopoly held by state-owned enterprises in the energy sector and to counter the effects of a rise in electricity prices, so Li was able to pay off loans in a few years and he then went on to acquire and build small-scale hydroelectricity stations across the country. In 2002, he managed to obtain 11% of shares in Jinanqiao hydroelectricity station, one of six major stations that Yunnan province was planning by a developer called Jinshajiang Hydroelectricity Development. The paper said that the 6 billion yuan (US$960 million) a year that the station generated became the foundation of Li's wealth. He remained a relatively unknown figure until he forayed into the solar energy sector in 2009. Li ambitiously pledged to raise his company's output to reach 3GW by 2012 and later 10GW, making Hanergy China's largest thin film solar cell maker. Wang Xiaokun, an analyst with Chinese market information service SCI International, said Li's ambitions weren't in line with demand, however, and China has not been able to find a buyer for its 13GW of electricity that it intended to export to Europe, which has only able to take 7GW. The businessman has been repeatedly accused of falsifying his business data. China's National Audit Office in June 2012 said Li's GW solar factory Dong Hanergy Solar falsified its scale and installed capacity to obtain a 2.6-million-yuan (US$421,000) government subsidy. Hanergy said the scale and capacity were limited by the factory's physical conditions so it relocated some of the factory's installed capacity and returned the subsidy in December of the same year. Since 2010, Li has also been entangled in legal disputes. His Huantian Hydroelectricity Station destroyed and flooded a 3000-square-meter winery and nearby fields and villages several times. The company agreed to compensation of 3 million yuan (US$480,000) for the winery after local government mediation. However, after paying 1 million yuan (US$160,000), the winery's owner accused the station of demanding that it exchange its 13,330 square meters of land for the remaining compensation. The villagers whose farms were destroyed in the flood have not received any compensation. Li drew controversy in the solar energy sector because of his business model, the technology he uses and his marketing strategies. He was not particularly early in entering the industry, nor are his factories dramatically larger in scale than those of his peers, but he chose to enter the sector with thin film solar cells, which have a higher technological threshold than photovoltaic cells. So far only US' First Solar has been able to develop advanced film solar cell technologies and manufacture them on a large scale. Although Hanergy said it has "the world's largest output and most advanced technology," it has never been listed on the solar module shipments rankings. The paper said that this suggests Hanergy has falsified its data or that its capacity utilization has been low. Its so-called advanced technology came from its acquisition of Mia Sole, a US producer of thin-film Copper Gallium Selenide solar cells and panels. However, Hanergy has never published the technology's cost per watt, which has been a major indicator of solar energy companies' performance. If a company were to raise the conversion efficiency of solar cell technology–the percentage of solar energy converted into electricity–costs would still be high. Yet Li has been able to use marketing strategies to boost Hanergy's reputation. Electric car brand Tesla built two solar-power charging stations in Beijing with Hanergy's thin-film flexible PV system in April last year, according to PR Newswire. The Chinese company also sponsored an international electric car race to boost its profile. The Hong Kong news outlet also suspects that Li has falsified his net worth. Although he was named the fourth richest person by Forbes China in 2013 with 6.6 billion yuan (US$1.1 billion) in assets, estimates of the percentage of shares in Hanergy owned by Li are put variously at anything from 50% to 97%. Hanergy, which claims a high output, also made suspicious financial moves at the end of 2013, borrowing 520 million yuan (US$83 million) from four financial companies with its 5.1 billion shares as collateral. Li's 200-billion-yuan (US$32 billion) thin-film solar energy development project received a total of 50-billion-yuan (US$8 billion) in funds from China Development Bank, Minsheng Banking Corporation and the Asia Financial Cooperation Association in 2011 and 2014. The funds were given to Hanergy in order to support the Chinese firm's overseas development, in the hope it can introduce advanced solar energy technology to China. References: Li Hejun 李河君 Wang Xiaokun 王曉坤 Poster Comment: Solar creates billionaires in China, bankruptcy in US. Post Comment Private Reply Ignore Thread
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