No conclusion in Sino-Forest's probe
Source: Bloomberg News |
February 2, 2012, Thursday
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Print Edition
Print Edition
SINO-FOREST Corp's eight-month investigation into the value of its timber holdings failed to reach a conclusion as it fends off fraud allegations from short-seller Muddy Waters LLC that it overstated its timber.
The company may not be able to disprove some allegations as the information may not exist or be retrievable, a committee of independent directors said in a report on the company's website. It wasn't able to reach "definitive conclusions" about certain relationships with suppliers and intermediaries of the company, Sino-Forest said yesterday in a statement.
The report is a setback to Sino-Forest's attempts to restore its reputation after the Muddy Waters allegations wiped off 74 percent of the company's value, costing investors including Paulson & Co C$3.3 billion (US$3.3 billion). Sino-Forest, which is suspended from trading in Canada, is being investigated by the Ontario Securities Commission and the Royal Canadian Mounted Police.
"It does not seem like the report has addressed the issues and can restore investors' confidence," Annisa Lee, a credit analyst at Nomura Holdings Inc, said by phone from Hong Kong. The appraisal of the assets is "key for bondholders to assess the valuation of the company and to determine whether the company could sell the assets and raise cash."
The committee doesn't expect to do further work except to provide information to regulators, the report said.
The company retained forestry experts Stewart Murray Pte and Indufor Asia Pacific Ltd to value its holdings on December 31. The consultants found two selected timber areas were within 6 percent of the stated holdings, using maps and high-resolution satellite imagery. The tested areas were a combined 147 hectares, the report said.
The company may not be able to disprove some allegations as the information may not exist or be retrievable, a committee of independent directors said in a report on the company's website. It wasn't able to reach "definitive conclusions" about certain relationships with suppliers and intermediaries of the company, Sino-Forest said yesterday in a statement.
The report is a setback to Sino-Forest's attempts to restore its reputation after the Muddy Waters allegations wiped off 74 percent of the company's value, costing investors including Paulson & Co C$3.3 billion (US$3.3 billion). Sino-Forest, which is suspended from trading in Canada, is being investigated by the Ontario Securities Commission and the Royal Canadian Mounted Police.
"It does not seem like the report has addressed the issues and can restore investors' confidence," Annisa Lee, a credit analyst at Nomura Holdings Inc, said by phone from Hong Kong. The appraisal of the assets is "key for bondholders to assess the valuation of the company and to determine whether the company could sell the assets and raise cash."
The committee doesn't expect to do further work except to provide information to regulators, the report said.
The company retained forestry experts Stewart Murray Pte and Indufor Asia Pacific Ltd to value its holdings on December 31. The consultants found two selected timber areas were within 6 percent of the stated holdings, using maps and high-resolution satellite imagery. The tested areas were a combined 147 hectares, the report said.
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