The founder of Chinese clean energy firm Hanergy Thin Film Power Group, Li Hejun, has apologized to the firm’s 15,000 employees for late salary payments, blaming a slowing economy and other unexpected setbacks for the delay.
His remarks, made in an open letter sent to staff and shared with Reuters by the company, mark a rare public admission by a Chinese company about issues being faced as the country’s economy expands at its weakest pace in almost three decades.
Slowing economic growth has hit profits at Chinese companies and impacted their ability to raise debt, while trade frictions with the United States have also exacerbated pressures, government officials and analysts have said.
Li pointed to such factors in his letter, saying that the company had started to pay salaries late to some employees after encountering “certain difficulties in the economy that have risen because of the complicated and changing external situation.”
He said that the company has not recovered many accounts receivable on time, and some financial partners have had their credit suspended.
Hanergy was listed on the Hong Kong stock exchange and experienced a run-up in its share price in 2015, which briefly made Li China’s richest man.
However, its share price spectacularly collapsed that year, triggering trading to be suspended for more than three years. Its parent took it private in June with a plan to re-list the firm in mainland China.
Li added that the company did have its own shortcomings, having not aligned its pace of recruitment and managed its labor costs against the prevailing economic backdrop, which in turn led to funding issues. He said the company was now working with the government to try and find solutions.
He did not say when these issues had started but said the company aimed to resume normal payment of salaries in November. Complaints about late payments by the company began surfacing on China’s Twitter-like Weibo platform as early as July, while local media reported last week on a worker protest at Hanergy’s Beijing headquarters.