Knowledge is the beginning of practice; doing is the completion of knowing.” So said the 15th-century neo-Confucian philosopher Wang Yangming.
It’s also an apt metaphor for investigators at China’s anti-corruption body, who are trying to ascertain what one of the most avid contemporary disciples of Wang has been up to.
That individual is Jin Baofang, chairman and CEO of JA Solar.
The Central Commission for Discipline Inspection (CCDI) arrested Jin earlier this month and is currently detaining the 68 year-old in Shandong province for further investigation.
Unsurprisingly, JA Solar’s share price has been in freefall since then, losing nearly a third of its value over the past two weeks. As of Thurday, it was still worth Rmb46 billion ($7.1 billion), however.
Jin’s arrest is particularly bad news for investors that took part in a Rmb5.2 billion ($790 million) share sale by JA Solar late last month. At the time the solar firm said it was selling a 18% stake to finance an ambitous expansion plan.
JA Solar was formerly listed on Nasdaq until it was taken private in 2017 in a $362 million buyout deal. It only went public again in Shenzhen in November last year via a backdoor listing that valued the company at about Rmb7 billion.
Only this summer it unveiled the world’s largest solar panel – an 810W unit, dubbed the Jumbo. In October, it also began production at a new 10GW plant in Zhejiang province that will help it to boost shipments to a targeted 16GW this year, compared to 10.3GW in 2019.
Things haven’t always been rosy for the company, which reported a string of losses during the industry’s long downturn in the early part of the last decade. In fact, the domestic media believes that JA Solar’s earlier feat of avoiding bankruptcy during that period of malaise may now explain Jin’s detention.
It comes one month after the arrest of Liu Baohua, former deputy director of the National Energy Administration (NEA). The CCDI have said that Liu is being investigated for serious violations of regulations and laws (a government euphemism for corruption).
Liu is the 20th official from the energy and power sector to be investigated by the CCDI so far this year and the most high profile since the NEA’s former head (and the former governor of the Xinjiang Uighur Autonomous Region), Nur Bekri, was jailed for life last December for accepting $11 million in bribes over a two-decade period.
Liu and Jin go back a long way. They are both from Hebei’s Ningjin county and both began their careers in Hebei’s Xingtai city. It’s still where JA Solar is headquartered.
Liu has been working in the energy and power sector for more than 30 years. According to ThePaper.cn, rumours have long been rife in the industry that Liu had been colluding with his fellow townsman.
According to Tencent News, the investigation might also link to Jin’s connection to a “Confucian institute” that actively promotes Chinese cultural confidence and national rejuvenation, leaning heavily on the teachings of afore-mentioned Confucian scholar Wang Yangming. Tencent News quotes JA Solar insiders who say that Jin has always seemed far more interested in promoting Confucian principles than developments in the solar industry. However, in an article published in December last year, ThePaper.cn likened the institute to a nationalistic cult, or a kind of ‘spiritual pyramid scheme’. Ostensibly an entrepreneur’s club, some companies have been required to pay a ‘sponsorship fee’ of as much as Rmb3 million in order to take part in “training”.
Jin’s speeches and interviews are steeped in the institute’s thinking. In one example he explained how “running a business is like conducting oneself. We are confronted with temptations, but no matter how hard the time is, do not doubt yourself, do not be scared and do not retreat from your mission”.
In the same ilk, Jin has professed that JA Solar’s corporate spirit is based on “honesty, simplicity, respect and gratitude”. But given his current predicament, the company’s 20,000 employees must be hoping that his past behaviour has lived up to that florid rhetoric – as will his shareholders.
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