New Horizon-backed Sinovel faces legal action over alleged IP theft

AMSC, which produces components used in 10% of the world's wind turbines, has filed a claim for arbitration against Sinovel with the Beijing Arbitration Commission, Bloomberg reported. It has also filed civil and criminal complaints in Beijing relating to the alleged stolen intellectual property, thought to be software and source code.

"We have evidence that senior-level Sinovel employees engaged and paid an AMSC employee who illegally obtained and transferred some of our intellectual property," AMSC Daniel McGahn said in a conference call with analysts. "We are aggressively pursuing all legal remedies against Sinovel."

The US firm alleges that Sinovel used the stolen intellectual property to upgrade hundreds of its wind turbines to meet proposed Chinese grid codes and so that the turbines could use electrical components from other manufacturers. The Chinese company declined to comment.

Sinovel is no longer a customer of AMSC, having refused to accept contracted shipments of electrical components and spare parts for 1.5 megawatt and 3 MW turbines in April. The Chinese firm accounted for about 70% of AMSC's revenue in the 2009 fiscal year and the US firm's shares have plunged 79% since the shipment was refused.

New Horizon took Sinovel public in Shanghai in January, raising $1.4 billion, and still holds a 13% stake in the company.

The private equity firm was co-founded by Winston Wen Yunsong, son of Chinese Premier Wen Jiabao, but he is no longer involved. The fundraising target for New Horizon Capital IV is said to be $750 million, the same amount raised for the third fund.

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• Topics
• Greater China
• Cleantech
• New Horizon Investment Advisors