Sept. 15 (Bloomberg) -- American Superconductor Corp., which provides components used in 10 percent of the world’s wind turbines, plunged the most in three months after it said an employee was jailed for stealing intellectual property and selling it to Sinovel Wind Group Co.
Shares of the Devens, Massachusetts-based company fell $1.07, or 15 percent, to $6.01 in Nasdaq Stock Market trading, the biggest decline since June 1.
Sinovel, China’s biggest wind-turbine maker, paid an American Superconductor systems integrator in Austria for software and source code, Chief Executive Officer Daniel McGahn said today on a conference call with analysts. He didn’t identify the worker, who he said was no longer with the company and is now in jail awaiting trial on charges including economic espionage.
“We have evidence that senior-level Sinovel employees engaged and paid an AMSC employee who illegally obtained and transferred some of our intellectual property,” McGahn said. “We are aggressively pursuing all legal remedies against Sinovel.”
American Superconductor said yesterday that it filed a claim for arbitration against Sinovel with the Beijing Arbitration Commission. It also filed civil and criminal complaints in Beijing related to the allegedly stolen intellectual property, it said in an e-mailed statement today.
“We’re concerned that the story around their wind business, particularly in China, has a very limited future without Sinovel,” said Paul Clegg, an analyst at Mizuho Securities in New York who has a “sell” rating on American Superconductor’s shares. “You suddenly go from a company that was profitable to one that is not going to be profitable for who knows how long.”
Sinovel refused to accept contracted shipments of electrical components and spare parts for 1.5-megawatt and 3-megawatt turbines, American Superconductor said April 5. The component company’s shares have plunged 79 percent since then. The Beijing-based turbine company generated about 70 percent of American Superconductor’s revenue in fiscal 2009.
“As of today, Sinovel is not a customer,” McGahn said. “Customers pay their bills and customers respect intellectual property.”
Sinovel used American Superconductor’s software to upgrade hundreds of its wind turbines to meet proposed Chinese grid codes and to allow the turbines to use electrical components from other manufacturers, he said.
Xiao Qiang, Sinovel’s spokesman, said by phone that it’s “impossible” for the company to comment before consulting its legal affairs department.
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