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China Forex Manager Said to Buy Hanergy Stake in New Energy Push

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The investment arm of China’s foreign-exchange regulator bought a stake in Hanergy Thin Film Power Group Ltd. as it adds alternative-energy assets to its portfolio, said people familiar with the matter.

SAFE Investment Co. bought a stake that’s less than 5 percent and worth billions of Hong Kong dollars, said the people, who asked not to be identified because the stake hasn’t been publicly disclosed. Another motivation for the move was Hanergy’s possible inclusion in Hong Kong’s benchmark Hang Seng Index, the people said.

Shares of the Chinese solar company have risen more than six-fold in the last year despite questions about its valuation and revenues. Shares rose to a record yesterday after Chairman Li Hejun bought a new stake, and then fell 8.5 percent today following a China Business News report that its parent had slowed or stopped some projects.

Membership in the Hang Seng Family of Indexes will be reviewed May 15, according to the company’s website. China National Radio reported earlier that SAFE Investment was buying shares in Hanergy.

The State Administration of Foreign Exchange’s media office didn’t immediately respond to a faxed request for comment and two calls to Hanergy Thin Film went unanswered. The Financial Times said in January that “unconventional practices” were behind the company’s rapid rise.

About 61 percent of Hanergy Thin Film’s revenue comes from sales to its main shareholder, Hanergy Holding, the listed company said in March. Chief Executive Officer Dai Mingfang told the newspaper at the time that the company is doing well even if it “makes other people suspicious” that its main client is also its main shareholder. Hanergy hasn’t said how much it expects to ship or install this year, a practice that stands apart from other solar companies.

Hanergy’s market value of $39 billion is higher than all other listed Chinese solar companies combined and is almost six times the value of Tempe, Arizona-based First Solar Inc., the biggest producer of thin-film solar panels.

— With assistance by Steven Yang, and Feifei Shen

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