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A Guardia di Finanza police car in a solar field. Italian Prosecutors Office

This story was reported and written by the International Consortium of Investigative Journalists, and is running simultaneously in L’Espresso in Italy.

As 2008 began, the future looked brilliant for green energy giant Suntech Power and its high-flying founder, Shi Zhengrong.

Suntech was one of the world’s largest makers of solar panels, the first non-state-owned Chinese company traded on the New York Stock Exchange. And Shi, born to a farm family so poor it had to put him up for adoption, was a self-made billionaire, hailed as one of Time magazine’s “Heroes of the Environment.”

Then Italy changed everything.

By 2012, Suntech’s push to dominate southern Italy’s solar industry landed it in the middle of a sprawling fraud scandal. Lawsuits and bankruptcy filings followed, the New York Stock Exchange kicked the company off its Big Board, and Shi stepped down as chief executive of the empire he’d built from nothing.

The story of Suntech’s fall links China to Italy, Germany, London and Wall Street, passing through some of the world’s leading tax havens and ending up — dolce vita fashion — in some of the most luxurious spots in Rome.

It’s a tale about the nexus of offshore financial secrecy and Italy’s onshore culture of corruption, featuring a cast of characters that includes figures linked to a businessman who has served, authorities allege, as a front for Mafia clans.

The story can be told in full detail for the first time thanks to secret offshore files and court records from around the world obtained by Investigative Reporting Project Italy and the International Consortium of Investigative Journalists as part of ICIJ’s “Offshore Leaks” probe.

Italian prosecutors claim that managers working on behalf of Suntech in Italy schemed with local business associates to pull off “the biggest solar energy fraud in Italian history” — using financial sleight of hand to illegally secure millions of euros in public funding for Suntech’s solar fields in Italy’s sun-soaked Apulia region.

Two of these business associates had previously collaborated in a major tax fraud with a business partner of Sicily’s powerful crime organization, the Cosa Nostra, court filings allege.

Much of the money involved in the deals moved in and out of tax havens, and many of the individuals involved used offshore companies and accounts to do business — an example of how offshore hideaways often play supporting roles in financial crime cases.

Offshore files, court claims and interviews with key players in the Suntech saga paint a picture of shell games spread across several national borders — including an alleged €560 million fraud involving fake German government bonds and money moving across the globe, as Suntech’s lawyers later put it, “in circumstances which are, to say the least, very murky.”

Italian authorities do not name Suntech in court documents and haven’t accused Suntech’s Cayman Islands-based holding company or its China-based main manufacturing arm of wrongdoing. But they have filed criminal charges, alleging fraud, criminal association and illegal diversion of public funds, against three managers who oversaw 10 Italian companies involved in Suntech’s investments in Italy.

Prosecutors allege that these managers and other conspirators bilked government agencies out of €6.5 million and, had they not been caught, would have eventually plundered hundreds of millions in public funds.

Suntech declined repeated requests to answer questions for this story, saying it can’t comment on pending legal matters. In the one thread of its Italian misadventure that has received substantial media attention — the doomed German bond deal used to finance its investments in Italy — Suntech said publicly that it was a victim of fraud, not a perpetrator.

Suntech Rises

Suntech founder Shi Zhengrong was born in 1963 on an island in the Yangtze River. After being taken in by his adoptive family, he grew to become a top student, eventually winning funding to do solar cell research in Australia, where he earned a Ph.D. and Australian citizenship.

In 2001, he moved back to China, using $6 million in local government money to start a solar cell factory. The business prospered and, in 2005, Shi oversaw the creation of a Cayman Islands entity, Suntech Power Holdings Co. Inc., which was used as a vehicle for an initial public offering on the New York Stock Exchange. On the first day of trading, the company’s share price shot up 41 percent.

By 2006 some analysts were calling Shi China’s richest person, with a net worth that would climb in the coming years as high as $4 billion.

As with many big Chinese companies, doing business through offshore havens was standard procedure for Suntech. Confidential records obtained by the International Consortium of Investigative Journalists link Shi and other Suntech executives to a network of offshore entities.

The records indicate Shi and as many as 11 other Suntech officials served as shareholders or officers for as many as 16 trusts and companies set up in the British Virgin Islands from 2005 to 2008. The documents indicate that several used identical structures, with a trust controlling one of the companies. At least one of the companies was intended to hold stock options to purchase 90,000 shares in Suntech’s Wall Street-listed holding company.

Suntech declined to comment on its executives’ offshore holdings, so the purpose of the trusts and companies remains a mystery. At least one of the entities — a British Virgin Islands company controlled by Shi — would play a role in Suntech’s Italian debacle.

High Heel

Suntech became a worldwide operation with dozens of subsidiaries, selling solar panels in more than 80 countries, establishing offices in international locales such as San Francisco, Zurich and Dubai, even opening a factory in Goodyear, Ariz.

One place where Suntech sought to increase sales was along the Mediterranean basin’s northern rim. Southern Italy’s Apulia region, which includes the “high heel” of Italy’s “boot,” seemed a perfect target. It had plenty of cheap, flat land, year-round sunshine and access to government financial incentives aimed at boosting solar-power capacity.

The company chose not to work through its already-existing subsidiary, Suntech Power Italy, but instead oversaw its Apulia initiative through an investment fund, Global Solar Fund S.C.A. Sicar, with an ownership structure that wove through three jurisdictions known as key outposts in the offshore system.

Suntech’s point man in its Southern Italy initiative, a Spaniard named Javier Ignacio Romero Ledesma, helped Suntech establish the Global Solar Fund in Luxembourg in 2008. Suntech controlled roughly 80 percent of the fund through a partnership also based in Luxembourg.

The rest of the fund’s shares were split among companies controlled by Romero and Shi, Suntech’s CEO. Shi owned his share of the Global Solar Fund through Best (Regent) Asia Group Ltd., one of his British Virgin Islands companies. Romero owned his stake though GSF Capital Pte. Ltd., a Singapore company that had a similar name to the Global Solar Fund but was in fact controlled by Romero and his wife.

Although Shi and Romero were listed as managers for the Luxembourg partnership that controlled the Global Solar Fund, it was Romero who did the groundwork in Italy, court records show.

Along the way, Romero hooked up with two Italian “solar developers,” Gaetano Buglisi and Roberto Saija, who had made names for themselves as independent operatives selling ready-made packages made up of green-energy firms that controlled both land and government approvals to build solar-energy plants.

“I have dedicated my life to green energy,” Buglisi told Investigative Reporting Project Italy. “I don’t even have a car. I move around by bike. We either go green, or we are doomed to destruction.”

Buglisi and Saija were successful enough in the green-energy game that they maintained business addresses at some of the most exclusive locations in Rome, including fashionable buildings near the Pantheon and the Vatican.

Through this pair, Romero arranged for Suntech’s Global Solar Fund to buy 27 Italian companies from Buglisi and Saija. The companies controlled leases on expanses of open land as well as government approvals to build solar fields on these tracts.

As Buglisi and Saija were becoming involved in Suntech’s Apulia push, they had other deals in the works too. According to prosecutors’ court filings in a criminal investigation in Milan, they were also operating as confederates in a separate fraud scheme involving Vito Nicastri, an entrepreneur with alleged links to the Italian underworld.

Nicastri, known as the “Lord of the Wind” for his powerful role in Italy’s wind-power industry, has had extensive business dealings with the Cosa Nostra, serving as “a legal façade for the unmentionable relationship between big business and mafia clans,” the Italian Antimafia Bureau in Trapani, Sicily, alleges.

Prosecutors claim Buglisi and Saija partnered with Nicastri in an offshore-enabled tax evasion scheme involving the sale of an Italian wind-power company, Windco, to a Belgian energy firm.

Saija declined comment for this story. Buglisi said in an interview that he paid all the required taxes “both in Italy and abroad” on the Windco deal and that he has been unfairly accused in the Windco case as well as in the solar fraud investigation involving Suntech’s Apulia investments.

He said he and Saija sold the companies involved in the solar energy case to Suntech’s Global Solar Fund in 2008, and had nothing to do with them when the alleged frauds took place.

“Why should I be investigated, and why on earth should I be considered to be a member of a criminal association with people I barely know?” Buglisi said.

Bonds of Trust

To bankroll its move into Apulia, Suntech turned to the China Development Bank, a massive lender controlled by the Communist nation’s central government.

The Chinese bank approved a €554 million loan for Suntech. As collateral, Suntech pledged €560 million in German government bonds. In theory, if Suntech couldn’t repay the loan, the bank could cover itself by taking possession of the German bonds.

As Suntech was roping in cash for its Italian ventures, Italian authorities were becoming suspicious about the solar fields that Suntech and other companies were acquiring in Apulia. Nicolangelo Ghizzardi, the criminal prosecutor in the province of Brindisi, launched a series of investigations that eventually led to government seizure of 70 solar plants. Twenty-seven of the seized plants were under Suntech’s control.

In December 2011, Ghizzardi filed court documents alleging that Romero, Buglisi, Saija and others used a network of Italian companies to disguise the fact they were taking over huge tracts of land and developing a massive solar power field.

By masquerading as smaller operations, the prosecutor’s court claims allege, the companies qualified for quicker environmental impact assessments, allowing Suntech to get fast access to government green-energy subsidies. In some instances, Ghizzardi claims, Romero secured government incentives by falsely certifying that construction of a solar field had been completed, when in fact the work hadn’t been finished.

In all, Romero and other accomplices acting for Suntech’s Italian subsidiaries siphoned away €6.5 million in government funds, the court documents charge. Ghizzardi contends that the alleged scheme would have grown much bigger — spiriting away €300 million in undeserved government funding — if he and Italian financial-crime detectives had not unraveled the fraud.

In a written statement through his attorney, Romero maintained that the money was not illegally obtained. He said the subsidies “did not disappear” — they were “reinvested in Italy.”

Suntech's Fall

By the summer of 2012, Suntech was under financial stress. The company had become the world’s largest maker of solar panels in 2010 and 2011, but it was now losing money amid slowdowns in the world economy and the solar energy sector.

One of Suntech’s worries was a $541 million payment coming due on U.S. bonds the company had issued in 2008. Shi and other Suntech officials figured, though, that they had a way out of their financial bind: They could sell Suntech’s stake in the Global Solar Fund and use the proceeds to cover the U.S. bond payment.

But as the company was laying the groundwork for the sale, something strange emerged. There was a problem with the German bonds that Suntech had used to secure the Global Solar Fund’s big loan from China Development Bank: They apparently didn’t exist.

In July 2012, during a conference call with corporate analysts, Suntech’s CEO, Shi, made a startling announcement: “We now suspect that the German government bonds may not have existed and Suntech may have been a victim of fraud.”

Shi assured analysts that, despite the revelation of the phantom bonds, it was “business as usual” at Suntech. Shareholders thought otherwise. In less than a week, Suntech’s Wall Street-listed arm lost 40 percent of its market value.

Shi stepped aside as CEO, noting wistfully that in 11 years he’d grown Suntech “from one employee to 15,000 …. We had to accomplish in a decade what many told me would take a century.”

In March 2013 the company announced that it had defaulted on the $541 million U.S. bond payment. In November, the New York Stock Exchange halted trading of Suntech stock, and the company began liquidation proceedings in the Cayman Islands. Last month the company filed for bankruptcy protection in U.S. Bankruptcy Court in Manhattan.

Legal Combat

Among the court battles Suntech has fought in the Americas, Asia and Europe has been the company’s legal showdown with Romero, the man who helped arrange the German bond deal and led its efforts in Southern Italy.

Suntech sued him first in London, then in Singapore, accusing him of fraud and mismanagement.

The company claimed that Romero was behind the German bond fraud, alleging that he had apparently siphoned €16.8 million for himself out of money he was supposed to have paid on Suntech’s behalf to cover the annual commission on the bonds.

Suntech claimed in court filings that the evidence indicated GSF Capital, the Romero-owned firm that was a key part of the Suntech’s Apulia initiative, was used as a cashbox to support Romero’s “extravagant lifestyle.” Romero’s credit card statements showed that in one month alone, he spent more than $130,000 in Gstaad, Switzerland, largely on hotels and purchases at a luxury watch and jewelry maker, Suntech said in an affidavit filed in the court proceedings.

Suntech claimed the evidence indicated that one British Virgin Islands company owned by Romero — Flolande Limited — received $13.7 million as a “consultancy fee” from GSF Capital and served as a conduit for “payments to another offshore company in circumstances which are, to say the least, very murky.”

Romero countered that he was no fraudster. He’d been defrauded in the German bond deal just as Suntech had been, he said. In fact, he said, he was the “main victim” of the scheme.

In the end, the case ended on a quiet note. In early 2013, Suntech reached an out-of-court settlement with Romero in which his company, GSF Capital, gave up its ownership share in Suntech’s Global Solar Fund. In an email to Investigative Reporting Project Italy, Romero’s attorney said that “the issue of the so-called fake bonds” has been “fully closed” without any finding of liability against Romero.

Offshore Hideways

Romero’s settlement with Suntech isn’t the end of his legal problems.

In September 2013, Ghizzardi, the Italian prosecutor, added to the charges against Romero and other defendants in the solar power case, accusing them of “criminal association.”

An arrest warrant could not be served on Romero, though. He is now living in Shanghai. Ghizzardi maintains that Romero is a fugitive from Italian justice because he hasn’t appeared in court in Italy to defend himself.

Romero’s attorney in Italy counters that Romero isn’t a fugitive, because authorities “know perfectly well” where he is. When the time is right, the attorney said, Romero will appear in the court in Italy to “vehemently defend himself” against the “unfounded” criminal charges that have been lodged against him.

Ghizzardi says that in addition to having trouble getting Romero appear in court, he has also been frustrated in his efforts to recover all of the money that he claims was illegally obtained in the solar power case.

His investigation has recovered just €3 million of the €6.5 million he alleges was bilked from the Italian government’s green-energy incentives fund. He believes the rest is stashed offshore, but he has little hope of tracking it down.

The secrecy that cloaks offshore companies and accounts often makes it impossible to get access to records and assets across international borders.

Even if a trial proves guilt on the criminal charges, Italian authorities will have little chance of recovering the money, Ghizzardi said in a court filing, because the suspects “can just move the money from one haven to another.”


Cecilia Anesi and Gianluca Martelliano are reporters at Investigative Reporting Project Italy.

The International Consortium of Investigative Journalists is a network of 175 journalists in 60 countries. More about ICIJ’s “Offshore Leaks” investigation can be found at