This year’s wild ride for Hanergy Thin Film Power Group Ltd. ends with the solar equipment maker a shadow of its former self, about $14.6 billion in paper losses for its chairman, the departure of key executives, a lawsuit over unpaid rent, canceled contracts and a regulatory investigation.

Chairman Li Hejun, the leader of the solar group and a self-professed solar visionary, stands, as usual, at the center. According to regulatory filings made public this week, Li has agreed to sell a 6 percent stake in Hong Kong-listed Hanergy Thin Film at a 95 percent discount to where they last traded.

The 0.18 yuan price means the chairman’s holding in Hanergy Thin Film has shrunk from HK$119.7 billion ($15.4 billion) when trading was halted on May 20 to just HK$6.03 billion. Its shares last traded at HK$3.91 before the suspension and subsequent investigation by Hong Kong’s Securities and Futures Commission, which is still probing the company’s ties to its Beijing-based parent, Hanergy Holding Group Ltd.

“That’s the current fair value unless he’s acting under duress,” shareholder activist David Webb said by phone. “Don’t forget it was a bubble stock.”

Share Suspension

Hanergy Thin Film now has an equity valuation of almost $20 billion less than when trading was halted more than seven months ago. At one point this year, its market value was bigger than those of Sony Corp. and Twitter Inc.

“Li’s sale of his 6 percent stake at a 95 percent discount to the last traded price would normally mean that the company has lost 95 percent of its value,” Alex Gardner, an analyst at Bloomberg Intelligence, said by e-mail. “As a consequence, other shareholders have lost 95 percent of their money on this valuation.”

The share sale provides closure of sorts for a company and executive that had portrayed itself as being on the vanguard of China’s aggressive build-out of renewable energy. At its peak, Hanergy Thin Film’s market value was more than six times that of the biggest U.S. solar manufacturer, First Solar Inc. of Tempe, Arizona.

Even before Hanergy Thin Film’s shares plunged, the solar manufacturer’s business model was under scrutiny. Hanergy Holding makes thin-film solar panels using equipment from Hanergy Thin Film.

In January, the Financial Times newspaper questioned why the bulk of Hanergy Thin Film’s sales were to the Beijing-based parent. Its production levels, borrowings and relationships with lenders have also been questioned.

Short Sellers

In September, Li lamented the “huge” financial loss, while blaming short sellers.

“Even though I’ve suffered big financially from the sell-off, what hurts me more are the losses for our shareholders, investors, institutional investors and our employees.” Li said in a speech posted on the company’s website.

Calls to the public relations department of Beijing-based parent Hanergy Holding went unanswered.

The company has faced a series of challenges since the share plunge and the regulatory investigation. In November, Ikea Group said it wouldn’t renew a contract to fit homes with solar panels.

A unit of the listed company also faces a lawsuit over HK$1.73 million in unpaid office rent and management fees. Hanergy Thin Film Power Asia Pacific Ltd., which is responsible for the company’s business in the region, is the target of a writ filed Dec. 3 at the High Court of Hong Kong.

Earlier this month, the solar equipment maker said Li Guangmin had stepped down as executive director and financial controller. The resignation is the third by a senior official announced by Hanergy Thin Film since the share suspension.

In August, Hanergy Thin Film said that some 2,000 positions at its headquarters, business units and regional offices would be cut. (Bloomberg)