Curious goings on at Chinese energy firm

Washington

THE only thing we know for sure is that stock in Hanergy Thin Film Power, a solar panel equipment company owned by what was at the time China's richest man, fell 47 per cent last Wednesday. We don't know why it fell, or even how much its chairman, Li Hejun, lost when it did, since he apparently upped his bet against his own company in the days before the crash.

When you put all the pieces together, however, it looks like Hanergy might be China's Enron: an Energy Company of the Future whose stock price could only go up as long as it was borrowing money and could only borrow money as long as its stock price was going up. In other words, a house of cards.

Now, the first thing to know about Hanergy is that it's really two companies. There's the privately owned parent corporation, Hanergy Group, and the publicly traded subsidiary, Hanergy Thin Film Power (HTF). The curious part is that almost all of HTF's sales are to its parent company at a ne…