Sino-Forest suing for fraud claimsThursday 5 Apr 2012 Chinese timberland company Sino-Forest Corp., which is being investigated for fraud, said that it is filing for bankruptcy protection, putting itself up for sale and filing a lawsuit against the research firm that accused the company of exaggerating its timber holdings in China.Sino-Forest said it will implement a restructuring plan if the company doesn’t receive a suitable takeover offer. “We believe the full value of our assets will only be achieved if we are able to continue operating the business, and repair and preserve relationships with our customers and suppliers,” Sino-Forest chief executive and vice chairman Judson Martin said in a statement. Sino-Forest was once Canada’s most valuable publicly traded forestry business, but shares plunged last year after short-seller Muddy Waters Research alleged that the company exaggerated its assets. Securities regulators in Canada suspended trading in the shares on the Toronto Stock Exchange. The company is under investigation by Canada’s national police force. Sino-Forest’s shareholders in Canada and the U.S. have also sued, alleging fraud at the company. Sino-Forest said last Friday that it is pursuing a lawsuit against Muddy Waters Research and its research director Carson Block, as well as others who have accused the company of fraud. The company accused Muddy Waters and Block of making defamatory statements and is seeking $4 billion and the recovery of profits made by the short seller and others. For recent media releases from the company, click here On Monday, Singapore-based Richard Chandler Corp, the largest shareholder in Sino-Forest Corp, said that it has proposed a restructuring plan for the forestry company. The investment group said it has assembled a team led by an Asian forestry expert to oversee its proposal for the Toronto-listed company, whose stock dived last year after a short-seller accused it of exaggerating its assets. "Over recent months Sino-Forest's business and financial resources have continued to deteriorate in the absence of a credible business plan which addresses the significant governance, leadership, strategic, operational and financial challenges facing the company," Richard Chandler Corp said in a statement. The link to a New Zealand forest in Northland that could be tied up in any asset sale can be read here and Greenheart's response is covered in another story in this week's issue. |
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