Tweet
But in its latest report on Wednesday, the company said the Muddy Waters allegations regarding related parties “have proved very difficult to definitively resolve”.
Bondholders will never get an answer because no one can know what happens in China. Even after Sino forest gets delisted and shutdown by Canadian officials, no one will know what really happened.
It is like the Bermuda triangle, any money that goes in will disappear.
http://www.ft.com/intl/cms/s/0/65bdb...#axzz1pLnf2YRp
Sino-Forest winds up internal fraud probe
By Robert Cookson in Hong Kong
Sino-Forest, the Chinese forestry company fighting accusations of fraud, released a final report into the allegations but provided little new information about its timber assets, cash pile, or relationship with suppliers.
The scandal-plagued company, which is being probed by Canadian regulators and police, said it had terminated the internal investigation even though “there remain outstanding issues that have not been fully answered”.
The work of the internal investigation committee had reached “the point of diminishing returns”, Sino-Forest said, “because much of the information which it is seeking lies with non-compellable third parties, may not exist or is apparently not retrievable from the record of the company”.
Analysts said the report would come as a disappointment to investors who hold $1.8bn of Sino-Forest bonds. Just last month, bondholders agreed to temporarily waive their right to force the company into bankruptcy.
“The report is very disappointing,” said Owen Gallimore, credit strategist at ANZ. “It’s not really added anything new to the inconsistencies and holes that were in the interim report.”
On Wednesday, Sino-Forest’s four tranches of bonds, due in 2013, 2014, 2016 and 2017, were all trading at about 30 cents on the dollar, a level that implies extremely high risk of default. A year ago, the bonds were trading above 100 cents on the dollar.
Sino-Forest’s shares, which are listed in Toronto, have been suspended from trading for the past five months. Last June, Muddy Waters, the US short selling group, caused the shares to plunge after it accused the company of overstating its assets and using related party transactions to defraud investors.
Sino-Forest has denied any wrongdoing and said a larger document released in November disproved the substance of the allegations it faced. But in its latest report on Wednesday, the company said the Muddy Waters allegations regarding related parties “have proved very difficult to definitively resolve”.
The final report said third-party consultants had verified a sample of 150 hectares of Sino-Forest’s timber assets. But analysts said the information inspired little confidence, since it represents less than 0.02 per cent of the 894,200 hectares of forest plantations under management that Sino-Forest said it owned as of June 30, 2011.
The company also said it would “vigorously defend” itself against a class action complaint lodged last week in the Supreme Court of the State of New York.
Sino-Forest did not provide an update on its cash balance or its plans to raise money. The company has promised bondholders that by the end of March it would give them a strategic plan for the sale of assets or raising of capital.
By Robert Cookson in Hong Kong
Sino-Forest, the Chinese forestry company fighting accusations of fraud, released a final report into the allegations but provided little new information about its timber assets, cash pile, or relationship with suppliers.
The scandal-plagued company, which is being probed by Canadian regulators and police, said it had terminated the internal investigation even though “there remain outstanding issues that have not been fully answered”.
The work of the internal investigation committee had reached “the point of diminishing returns”, Sino-Forest said, “because much of the information which it is seeking lies with non-compellable third parties, may not exist or is apparently not retrievable from the record of the company”.
Analysts said the report would come as a disappointment to investors who hold $1.8bn of Sino-Forest bonds. Just last month, bondholders agreed to temporarily waive their right to force the company into bankruptcy.
“The report is very disappointing,” said Owen Gallimore, credit strategist at ANZ. “It’s not really added anything new to the inconsistencies and holes that were in the interim report.”
On Wednesday, Sino-Forest’s four tranches of bonds, due in 2013, 2014, 2016 and 2017, were all trading at about 30 cents on the dollar, a level that implies extremely high risk of default. A year ago, the bonds were trading above 100 cents on the dollar.
Sino-Forest’s shares, which are listed in Toronto, have been suspended from trading for the past five months. Last June, Muddy Waters, the US short selling group, caused the shares to plunge after it accused the company of overstating its assets and using related party transactions to defraud investors.
Sino-Forest has denied any wrongdoing and said a larger document released in November disproved the substance of the allegations it faced. But in its latest report on Wednesday, the company said the Muddy Waters allegations regarding related parties “have proved very difficult to definitively resolve”.
The final report said third-party consultants had verified a sample of 150 hectares of Sino-Forest’s timber assets. But analysts said the information inspired little confidence, since it represents less than 0.02 per cent of the 894,200 hectares of forest plantations under management that Sino-Forest said it owned as of June 30, 2011.
The company also said it would “vigorously defend” itself against a class action complaint lodged last week in the Supreme Court of the State of New York.
Sino-Forest did not provide an update on its cash balance or its plans to raise money. The company has promised bondholders that by the end of March it would give them a strategic plan for the sale of assets or raising of capital.
Comment