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<p>The Ministry of New and Renewable Energy (<a href="https://mnre.gov.in/" target="_blank" rel="noreferrer noopener">MNRE</a>) has issued an advisory
asking the stakeholders to beware of two Chinese companies &#8211; CSUN Trading (Hong
Kong) Co. Ltd. and CEEG (Shanghai) Solar Science Technology Co. Ltd.</p>



<p>In its advisory, the MNRE noted that the companies that had
entered into module supply agreements with CSUN and CEEG had approached the ministry
stating that the two companies breached the contracts by not supplying the
modules by the terms of the agreement and
did not return the advance paid to them.</p>



<p>The aggrieved parties also brought to MNRE’s notice that in January 2019, the Singapore International Arbitration Centre had settled a similar matter in favor of an Indian company. The matter involved CSUN and CEEG (both are part of the same group). <a href="http://www.csun-solar.com/73.html?&amp;L=3&amp;tx_ttnews%5Byear%5D=2010&amp;tx_ttnews%5Bmonth%5D=03&amp;tx_ttnews%5Btt_news%5D=97&amp;cHash=e59e6cbaa0b078d2259f08a258127353" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">CSUN</a> had acquired 100 percent stake in CEEG (Shanghai) Solar Science &amp; Technology Co., Ltd and CEEG (Nan Jing) New Energy Co., Ltd in 2010. CSUN was <a href="https://www.prnewswire.com/news-releases/china-sunergy-announces-receipt-of-delisting-notice-300233226.html">delisted</a> from NASDAQ in 2016 as it failed to regain compliance with the Listing Rule related to the maintenance of minimum Market Value of Publicly Held Shares of $15,000,000 within a compliance period of 180 calendar days.</p>



<p>The ministry has observed that such breach of valid contracts and not supplying modules on time are intolerable. Further, it approached the Ministry of External Affairs (<a href="https://www.mea.gov.in/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">MEA</a>) to bring to the attention of the Chinese authorities the breach of contracts by CSUN and CEEG. </p>



<p>The MEA, at the behest of the MNRE, asked the Chinese
authorities to order the defaulters to meet the contractual obligations to the
Indian companies and to honor the arbitration award by Singapore International
Arbitration Centre.</p>



<p>The Consulate General of India, Shanghai, informed that the
above-mentioned Chinese companies are high-risk companies and have over 160
court cases against them, mostly for breach of contract with millions of RMB in
compensation amount.</p>



<p>Keeping this in mind,
the ministry has advised the stakeholders to contact Embassy of India, Beijing,
China or the Consulate General of India, Shanghai, to verify the standing and the
reputation of various Chinese companies before placing any orders so that such
incidents can be avoided.</p>



<p>The MNRE has also requested the Department of Financial
Services, Ministry of Finance, to take appropriate action, by informing all
banks, lending institutions, to avoid any possible non-performing assets,
regulatory issues in the future.</p>



<p>When contacted, a market insider said, “It took the industry
almost 6-7 months to reach this stage and get the MNRE’s support. This Chinese
group is a repetitive defaulter. They took many small and big contracts and
then defaulted on them all. Now, this order will put pressure on the firm to
honor contracts. Meanwhile, the Indian
companies are also undertaking parallel negotiations with CSUN group to supply
the modules and to turn this whole issue around.”</p>



<p>“If CSUN doesn’t supply, then we can undertake international
arbitration or approach the Chinese courts for relief,” added the market
insider. </p>



<p>When contacted, a government official informed that even
procurers need to be mature and act according to their due diligence and perform
checks on the firms they are entering into contracts. After this strongly-worded
order from the government, if the company in question wants to remain an active
player in the Indian market, it will have to honor its old contracts. Else, it is
likely to lose out on a huge, booming solar market.“</p>



<p>India was the <a href="https://mercomindia.com/india-solar-market-2018-behind-china-us/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">third largest solar market</a> behind China and the United States with 8.3 GW of solar PV capacity installed in 2018. Japan and Germany were the fourth and fifth largest solar markets in the world. </p>



<p>This action by the ministry sends a strong message to the defaulters
in the solar industry. However, solar procurers are eventually responsible for
their own actions especially if purchasing decisions are based on just the
lowest price instead of quality and reputation of the vendor.</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/saumy/" class="vcard author" rel="author"><span class="fn">Saumy Prateek</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><div class="designboxt">
<p><img class="alignleft" style="border-radius: 50%;height: 50px;margin-top: -4px;border: 1px solid #00b451" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/12/saumy-edited-1.png" width="50" /></p>
<p><strong style="text-decoration: underline">Saumy Prateek</strong> Staff reporter at Mercom India<br />
<a href="https://mercomindia.com/author/saumy/" target="_blank" rel="noopener">More articles from Saumy Prateek</a></p>
</div>
<div class="authorboxn"><img class="alignleft" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/12/saumy-edited-1.png" width="79" height="102" /><a href="https://mercomindia.com/author/saumy/" rel="noopener"><strong>Saumy Prateek, </strong> </a>is a senior staff reporter with MercomIndia.com covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism &amp; Mass Communication from the Manipal Institute of Communication at Manipal University.<a href="https://mercomindia.com/author/saumy/">More articles from Saumy Prateek.</a></div>
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MNRE Takes a Tough Stand Against Two Defaulting Chinese Solar Module Suppliers

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