U.S. thin-film manufacturer First Solar has insisted its decision to reach a $350 million settlement with shareholders who claimed they were misled by the company over a near-four year period is not an admission of guilt.
In announcing settlement of the Smilovits v First Solar Inc lawsuit in the U.S. District Court for the District of Arizona on Monday, CEO Mark Widmar said: “We are confident that resolving this matter is the right business decision for First Solar and its shareholders. While we are confident in the facts and the merits of our position, we believe it is prudent to end this protracted and uncertain class action litigation process and focus on driving the business forward.”
The class action lawsuit was led by British shareholders the Mineworkers’ Pension Scheme and the British Coal Staff Superannuation Scheme and was lodged by U.S. legal firm Robbins Geller Rudman & Dowd LLP in 2012.
The complainants claimed First Solar had initially concealed a manufacturing defect which led to rapid power loss in its modules and a design problem which caused power losses in hot climates before misrepresenting the costs and scope of remedying the faults and reporting false information in financial updates to the stock market. The complainants said the alleged offences occurred from April 30, 2008 to February 28, 2012.
First Solar denied all charges.
The manufacturer has reached a settlement with class action correspondents who acquired First Solar shares during the period in question, with the payment subject to approval by the district court. A press release issued by Robbins Geller on Monday stated the deal had been agreed a day before jury selection was due to take place for a planned trial.
First Solar on Monday noted two other related lawsuits are still pending: that of Maverick Fund LDC v First Solar, which involves stockholders who opted out of the class action; and the Bargar et al v Ahearn et al derivative case lodged in the Superior Court of Arizona, Maricopa County. The first-quarter 2017 update published by First Solar indicates the latter case consists of an action lodged against current and former directors and officers of the company accusing them of, “among other things, breach of fiduciary duties, insider trading, unjust enrichment and waste of corporate assets”.