Soylandra raid: Who inspects the inspector?

[Nuclear Unicorn]

As many know by now Soylandra was just raided by the FBI. This is the company that got over $500 million in loan guarantees at a favorable, below-market rate with the US taxpayer effectively listed as the last creditor to be repaid. The money is gone and around 1,000 people will lose their jobs.

Yeah, there seems to be plenty of reasons to investigate (if only they were bankers, they would have been home free).

But here is where I'm suspicious.

Obama will be giving his jobs speech tonight in a forum generally reserved for major announcements along the magnitude of wars. Soylandra was a showpiece for earlier green jobs initiatives by the president. We need jobs, especially green ones but this raid seems perfectly timed to embarrass the president just hours before his speech that will almost certainly contain calls for green jobs.

Maybe I'm being paranoid but did the Inspector General at the Dept. of Energy have the FBI raid Soylandra to embarrass the president?

Should it at least be investigated?

[Broderick]

1. My concern is that another

one for 300M is being touted by the administration for almost an identical venture as of yesterday.

Where is this money going?

[DURHAM D]

2. So you want to investigate the raid.

Really?

[Nuclear Unicorn]

5. It would not be unheard of for law enforcement actions to be politically motivated

It is also very likely the timing is merely a coincidence.

The harm to any green jobs initiatives the president may propose seem all but certain. This raid will become the centerpiece of GOP efforts to strangle those jobs in the crib.

So if the harm is certain is there any harm asking if it was politically motivated?

If Soylandra has broken the law they can still be dealt with according to law but an inspector general that *possibly* uses their power to advance a personal political agenda should find employment elsewhere.

[sabrina 1]

3. I don't know anything about why they went under, so can't say

if the raid is warranted. Or to embarrass the president. Wasn't the company he praised and used as an example of how Green jobs can help stimulate the economy?

It could embarrass him and it could be a blow to further funding of these kinds of initiatives which the Republicans will use.

[supraTruth]

4. What I haveN'T seen reported yet, is how much money did the Solyndra CEO walk away with?

[robdogbucky]

6. As of June, 2010, the former Solyndra CEO pulled down 400K

Solyndra IPO Canceled

And they raise another $175 million dollars to bring their VC funding totals to more than $1 billion

“...Given the ongoing uncertainties in the public capital markets, we elected to pursue alternative funding from our existing investor base. This funding allows us to address strong customer demand by maintaining our aggressive growth plans,” commented Dr. Chris Gronet, CEO of Solyndra. Gronet has a base salary of $400,000...

http://www.greentechmedia.com/articles/read/solyndra-ipo-cancelled/


(And on the same day the loan guarantee came through);



Solyndra Founder Received Millions In Stock Options Same Day Stimulus Loan Announced

By John Romano

(YBH) – According to an SEC filing Dr. Christian M. Gronet the founder and CEO of Solyndra, Inc. received $13.9 million worth of stock options on the same day that a $535 million loan guarantee from the United States government was announced. The filing, an amended s-1 form, details that Dr. Gronet received 10,000,000 options with a strike price of $1.39 on September 4, 2009. The very same day, Vice President Joe Biden spoke to a group of Solyndra employees and investors announcing publicly that Solyndra had “closed” a $535 million loan via the stimulus act.

ccording to the S-1 (a filing used to register public securities with the SEC) Solyndra took pains to caution investors about the risks inherent to the company. Under headings such as “We are exposed to the credit risk of some of our customers, as well as credit exposures in weakened markets, which could adversely impact our financial condition and operating results”, “We face intense competition”, and “We may be unable to sustain our growth or manage the expansion of our operations effectively and implement effective controls and procedures”, among others.

While many of the risks detailed in the Solyndra S-1 are boilerplate legal protections for corporations and investors alike, the risks noted in Solyndra’s case bear greater scrutiny due to how new the company was, the fact that it had never turned a profit and that it didn’t generate a dime of revenue until the fiscal year 2008 ending January 3rd of 2009. None of that was a concern apparently for the Obama administration which allegedly rushed Solyndra through the loan process.

Dr. Gronet founded Solyndra, Inc. under the name Gronet Technologies in 2005. The company was renamed in 2006. Before founding Solyndra, the Stanford trained Gronet was an executive with Silicon Valley chipmaker Applied Materials. In July of 2010 he stepped down as CEO of Solyndra and moved into the role of Chairman of the Board of Directors. Unfortunately for Dr. Gronet, he may never see a huge pay day from his existing shares or stock option grants. The 11 million shares he currently owns and the 10 million he received when Solyndra landed its $535 million slice of stimulus pie in 2009 will likely hold little future value. It was announced last week that Solyndra, Inc. is headed for bankruptcy court. When announcing the loan, Mr. Biden called Solyndra’s new jobs “permanent ones”. Like much of the projections attached to the 2009 stimulus bill, things didn’t go as planned...


http://yesbuthowever.com/solyndra-founder-received-millions-stock-loan-5001052/



FBI serves search warrants at Solyndra

Henry K. Lee,David R. Baker, Chronicle Staff Writer

09/08/11

...Solyndra was the first company to receive a multi-million-dollar loan guarantee from the federal government as part of the Obama administration's effort to create green jobs. The company, founded in 2005, received $528 million in federal loans to help build a factory in Fremont for making tube-shaped solar modules.

But Solyndra closed its doors on Aug. 31, saying it couldn't compete against cheap solar cells flooding into the market from new, heavily subsidized factories in China. The company filed bankruptcy papers earlier this week, listing $784 million in secured loans, including the government's money.

Solyndra's abrupt collapse has turned into a political embarrassment for the Obama administration. Last year, Obama toured the company's new plant and said that "The true engine of economic growth will always be companies like Solyndra." Critics have seized on the closure to brand Obama's green-jobs initiative a waste of taxpayers' money.

The company closed without warning and without giving the advance notice to its workers that many large companies must provide under federal and state law. The company has said it believed it was exempt from notifying its 900 full-time and 200 contract workers under a loophole in the Worker Adjustment and Retraining Act...


Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/09/08/BAFF1L1RQV.DTL#ixzz1XO6oZTB6




Solyndra CEO last January: Company is “on the right track”

Last January, the Merc’s Dana Hull wrote a tough but fair story about Solyndra, the solar manufacturer in Fremont that had fallen on rough times.

The company was in full denial. Just a few weeks earlier, when I was speaking at a media forum, I made reference to Solyndra’s problems. A PR rep came up to be after the event and insisted things were going well and the company had big plans.

And then, after Hull’s story ran, we received the following email from the Solyndra CEO:


....Of course, on Wednesday, we finally got the real story: the company is shutting the doors. There’s no shame in failing. This is Silicon Valley, after all. But it’s hard to respect corporate leaders who expended so much energy spinning their problems, rather than facing up to them.


http://www.siliconbeat.com/2011/08/31/solyndra-ceo-last-january-company-is-on-the-right-track/


Interested readers should click on the story to read what Brian Harrison, Solyndra's CEO had to say. It would have pushed the cut and pasted excerpt past the 4 paragraph limit usually respected herein.




Eric Wesoff, Michael Kanellos:July 27, 2010

Update: Solyndra Swapping Out CEO, Gronet

A painful restructuring after the thin-film CIGS company’s IPO is withdrawn

Rumors confirmed: Brian Harrison has joined Solyndra as President and CEO. Since 2008, Mr. Harrison has served as President and CEO of Numonyx, a flash memory company with issues of its own that recently got bought by Micron Technology. Chris Gronet, Solyndra’s founder and current CEO, will continue as Chairman of the Board of Directors.

The VC playbook is rather thin. Provide more money, stop providing money or replace the CEO are the primary actions VCs faced with flailing company performance tend to take. In this case, the chosen course of action is to replace the CEO.

The changes come amid a painful chapter in one of the solar world's more engrossing melodramas. The company, which has created a novel tubular solar panel, has raised more than $1 billion from investors and nabbed hundreds of millions in government loans. President Obama and Steve Chu have spoken at the factory. The company has even nabbed clients like Anheuser-Busch. Nonetheless, the tubular panels cost far more to produce than conventional solar panels, making the likelihood of long-term success a question mark in investors' minds. Solyndra's average sale price is around $3.24 a watt and the company has been selling panels at a loss. Crystalline silicon solar panels sell for $1.95 or less a watt and companies can sell them for a profit.

We reported that Gronet was out last night and that power in the company had shifted to Argonaut Private Equity, which owns a large portion of the company. Solyndra said Gronet worked at the company but that management changes were afoot. The formal announcement came today...

http://www.greentechmedia.com/articles/read/Executive-Exodus-and-Low-Morale-at-Solyndra/




March 3, 2011, 3:58 PM ET
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Solyndra CEO: We Made Two Major Mistakes

By Yuliya Chernova

Solyndra Inc., a once-shining star in the solar industry that has been in restructuring mode after a turbulent year, made two major mistakes: It expected too much growth, and it focused too little on market development.

That’s according to Solyndra’s Chief Executive Brian Harrison, who spoke on Thursday at The Wall Street Journal’s ECO:nomics conference in Santa Barbara, Calif.

His thin-film solar company, which filed for an initial public offering in December 2009 before withdrawing it a few months later, has focused on cutting costs as competition from the rest of the solar market made its value proposition less viable. The company’s equity investors, which put in close to $1 billion, have seen their stakes rapidly lose value even as they have had to continue putting more capital into the company, as detailed in VentureWire today. Solyndra’s shot at the public markets last year fizzled and it pulled its registration documents.

At the same time, the Department of Energy, which issued the company a $535 million loan guarantee in 2009, has also been squeezing the terms of the loan, to ensure repayment...

http://blogs.wsj.com/venturecapital/2011/03/03/solyndra-ceo-we-made-two-major-mistakes/