Emcore (NASDAQ:EMKR) To Become Largest Solar Provider in Fantasyland.


As Wall Street Continues to ignore the blatant fraud at Emcore, Citron thought we would address this in a novel way through an open letter to management. Emcore continues to tout a solar backlog but Citron has found no verifiable commercial size orders that could represent more than 5% of stated backlog. We hope that either management can address some of these concerns in this letter or prepare themselves for the consequences. Gentleman, securities fraud is a serious matter like everything else in fantasy world; it is never a problem, until it’s a problem

Open Letter to Emcore Management

Reuben Richards COB
Hong Hou CEO
Emcore Corp

Dear Sirs,


In June 2007, you formally endorsed Green and Gold Energy’s efforts to promote itself on your letterhead,
http://citronresearch.com/wp-content/uploads/2008/04/danziliolettergge.pdf .In August 2007, Emcore publicly stated it received a $24 million purchase order from Green and Gold Energy. The PR included a quote from Green and Gold’s CEO, Greg Watson.

Then in February 2008, Emcore claimed an additional $39 million purchase order from GGE.

In May, you announced a $28 million purchase order from SunCube International Group (SCIG) member ES System in Korea.

More recently, Emcore and its analysts have stopped referring to Green and Gold Energy, and claim no backlog from Green and Gold; instead claiming that Green and Gold has encouraged its “SCIG” group customers “deal direct” by placing orders with Emcore.

The SunCube International Group (SCIG)


Green and Gold Energy’s SCIG is composed of 5 companies. What is consistent and disturbing about this list is the utter absence of any financial substance necessary to execute a large-scale solar project. After trying diligently to contact these parties, it is the belief of Citron Research that at least 4 of the 5 group members are frauds.

Here’s what we’ve found so far:
ES System (Korea)
· Has announced projects totaling 70 MW in size, which would place among the top 10 solar projects worldwide
· Has refused to disclose locations or financing
· Did not appear at recent solar power industry conference in South Korea
· Projects unknown among major Korean solar companies

Energies AC Gava (Spain)
· No independently verifiable confirmation that the company exists
· No independently verifiable information about any projects by this company
· Company cannot be reached at phone number http://www.acgava.net/index.php?option=com_contact&Itemid=3

Square Engineering (India)
· Claims it has a “fully developed manufacturing facility” in Satara Maharashtra
· However, photos show only a shell building under construction
· No verifiable information about any sizable projects or funding

Solar Ace (Israel and middle east)
· No independently verifiable information that this company exists
· No verifiable information about any projects or funding

Zolar Distributors (Australia, New Zealand, South Pacific)
· Not an independent company, but rather an (undisclosed) related party to Green and Gold. The Zolar website is registered to George Zoumis, Business Development Manager of Green and Gold Energy.
(Details at: http://citronresearch.com/index.php/2008/03/25/citron-research-updates-emcore-nasdaqemkr/#more-330 )

Greg Watson actively promoting Emcore stock

Now that Greg Watson is publishing in the US financial press as an active promoter of Emcore’s stock, http://seekingalpha.com/article/79261-shining-light-on-emcore?source=yahoo , we call upon the company to clear the public record as to:

  • the full and complete status of each of these orders, including dollar amount shipped, and the dollar amount of deposits received on each
  • the totality of Emcore’s financial relationships with the SCIG companies and GGE
  • the identity of any company comprising at minimum 5% or more of Emcore’s terrestrial solar backlog

Citron Research wishes to advise you that Emcore, and specifically Mr. Watson, as its agent, is in violation of US Securities Laws, which provide for strict disclosure rules regarding the truth of material public statements from and about publicly traded companies.

Further, US Securities laws require that due to Mr. Watson’s material financial relationship with Emcore, he is obliged to disclose, in each and every public writing about Emcore, the full nature of that relationship.

Yours truly,

Citron Research