An Italian court filed charges yesterday against the Suntech Global Solar Fund (GSF), an investment fund controlled by the world’s largest solar panel manufacturer. That’s just the latest bad news for Suntech, which has lost more than 40 percent of its market value since the end of June.

Suntech, based in China, set up the GSF in Luxembourg to handle European solar developments. Now, Italian officials say the GSF has been funding illegal construction of solar power plants in order to get paid incentives. The fund’s subsidiaries tried to sidestep legal processes required of 1 MW or larger solar plants by dividing each plant into smaller units. Court documents also show some cases of announced project completion in attempts to meet incentive deadlines before construction was actually finished.

The permitting process is lengthy, complicated and expensive for large solar power plants. Is that a good thing? No. But, of course, neither is fraud. The company tried to circumvent the bureaucracy by artificially splitting big projects into smaller plants that could be approved more quickly. The tragedy now is that solar projects providing more than 20 megawatts of power may be dismantled. The projects are worth an estimated $100 million.

Earlier this summer, Suntech was sued by U.S. law firms as well, this time on behalf of shareholders outraged that GSF executive Javier Romero had used $700 million in fake German bonds to guarantee some of GSF’s financing. In both cases, Suntech is being accused of not disclosing knowledge they had about the fraud. It may ultimately be the end of the company.

Main photo credit: Suntech