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Solar Mirages Bring Muddy Waters Concerns to Panel Makers

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Investors are starting to doubt profit estimates for China’s solar manufacturers as concerns about accounting practices first spotted at a forestry company spread nationwide.

Directors leading audit committees quit LDK Solar Co. on July 18 and at its rival Trina Solar Ltd. on July 12. Moody’s Investors Service on July 11 cited “accounting risks” at five Chinese companies including LDK. Muddy Waters LLC, a Hong Kong researcher, on June 2 accused Sino-Forest Corp. of inflating its timber production.