UPDATE 1-Hanergy seeks trading resumption as parent pays down overdue cash

* Parent Hanergy Holding pays down 1.5 bln yuan of overdue funds

* Founder Li pledges shares as guarantee on HK$3.2 bln of payments

* Auditor issues “qualified opinion” on 2016 results (Adds details on share suspension, court proceeding and 2016 results)

HONG KONG, March 31 (Reuters) - Hanergy Thin Film Power Group, the solar panel maker being investigated by Hong Kong’s securities regulator, said its parent had paid down some overdue debt, part of a push to end an almost two-year share trading suspension.

Parent Hanergy Holding paid 1.5 billion yuan ($218 million) in overdue trade receivables on March 10, reducing the overdue amount owed to about HK$3.2 billion ($412 million), Hanergy said in a securities filing late on Thursday.

Founder and former Chairman Li Hejun also signed a “deed of guarantee” committing to pay the remainder of the funds over a period of two years after shares in Hanergy resume trading. Li pledged 1.4 billion Hanergy shares as collateral on the payment agreement.

Hanergy has been engulfed in controversy since it asked the Hong Kong stock exchange to suspend trading in its shares on May 20, 2015, after the company lost half its $40 billion market value in just 24 minutes. Eight days later, Hong Kong’s Securities and Futures Commission (SFC) said it was investigating Hanergy’s “affairs” and subsequently directed the bourse to extend the suspension indefinitely.

The regulator has set two requirements to allow trading to resume: one that Li and four Hanergy directors “not contest liability” and court orders barring them from managing any corporations in the city, and another for Hanergy to release detailed information about its finances.

Li and the four directors said in January they would not contest the SFC’s suit, while Hanergy also reiterated it was working on the disclosure document detailing information on its business, financial performance and prospects to address the SFC’s concerns.

The company said in the filing it posted HK$251.6 million of profits in 2016, reversing a HK$12.2 billion loss in 2015 that was weighed down by a plunge in revenue and HK$9.7 billion in goodwill impairments after it failed to deliver a production line to its parent and controlling shareholder.

The company had HK$248.7 million in cash and equivalents at the end of 2016. It also had HK$6.8 billion worth of trade receivables, with HK$3.9 billion of those owed by its parent Hanergy Holding and other affiliates and the vast majority more than one year past due, according to the filing.

Hanergy’s auditor, Ernst & Young, issued a so-called “qualified opinion” on the 2016 results, because it was “unable to obtain sufficient appropriate audit evidence about the recoverability of the group’s remaining trade receivables and gross amount due from contract customers” worth about HK$6.2 billion, the company said.

Auditors typically issue a qualified opinion when they believe the financial information is not complete. ($1 = 7.7697 Hong Kong dollars) ($1 = 6.8970 Chinese yuan renminbi) (Reporting by Elzio Barreto; Editing by Edwina Gibbs and Stephen Coates)