China's Suntech victim of alleged fraud

China’s Suntech Power Holdings (STP.NYSE, S9H.FRA), the world’s largest solar panel manufacturer, said that it may have been the victim of fraud involving a 2010 loan guarantee, Bloomberg reported. Suntech had guaranteed a loan to Spanish-managed Global Solar Fund, an investment company for power projects, but failed to verify the US$687 million in German bonds that were used as collateral. The bonds “may not have existed,” said Zhengrong Shi, Suntech’s chairman and CEO. The company may delay its second-quarter earnings report while it assesses the damage from the deal. Suntech said it has filed suit “against relevant parties in multiple jurisdictions” over the alleged fraud. Already facing significant debts, Suntech will likely have to turn to Chinese lenders for further credit, as it is unlikely that it will be able to raise equity in the US, said analyst Adam Krop of Ardour Capital Partners in New York.