New York Investor Burned by Bad Bet on Hong Kong Solar Firm

(Bloomberg) -- The tribulations of a little-known Hong Kong solar developer whose former chief executive officer was accused of siphoning money has spilled onto Wall Street.

A fund run by a former Goldman Sachs & Co. partner is suing to recoup $116 million in loans from the developer, Sky Solar Holdings Ltd., according to a Feb. 8 affidavit by Hudson Sustainable Investments LLC Chief Executive Officer Neil Auerbach.

The suit, filed in New York State Supreme Court, is a reminder that even as solar has grown into a mature industry with large established companies, the landscape remains dotted with upstarts that can pose higher levels of risk. Sky Solar -- which has a market value of $29.5 million and operates solar farms in Asia, Europe and the Americas -- has been grappling with scandal for more than a year.

In 2017, an independent committee formed by the company concluded its former chief executive officer transferred funds to companies he controlled without approval from Sky Solar’s board or audit committee. He agreed to repay $15 million.

Sky Solar’s American depositary receipts have declined 96 percent to 56 cents from their high in January 2015. A spokesman for the company didn’t respond to an email or voicemail.

Auerbach co-founded the U.S. alternative energy investment business within Goldman’s Special Situations Group and established Hudson Clean Energy Partners in 2007.

©2019 Bloomberg L.P.