For the second time in six months, no
raw logs are being exported from Vancouver Island ports this week. Is this related to the troubles of Sino-Forest Corp? The former giant in the Chinese and world
forest industry is facing bankruptcy and fraud allegations. Its impending
demise may cast a harsh light on other forest companies and their accounting methods.
Sino-Forest Corp. is in for a long road of uncertainty ahead as the once
top-rated forestry company, now struggling to find a buyer, faces fraud
allegations by the Ontario Securities Commission.
The firm, which the OSC accuses of misrepresenting its revenue and the
extent of its assets in China, has been exploring its options, which might
include a sale of the company.
The company filed for bankruptcy protection March 30 and put
itself up for sale ...
Last year, investors in BC joined a
$9.18-billion class-action lawsuit against the company.
When the fraud allegations became public, stock
prices quickly collapsed.
From the
Vancouver Sun:
British Columbia’s biggest public-sector pension manager has
joined a proposed class-action lawsuit seeking compensation from the embattled
Chinese timber company.
Sino-Forest, once Canada’s biggest forestry-related company with timber
operations in China, headquarters in Mississauga and stock listings in Canada
and the United States, saw its share value collapse after short-seller Carson
Block targeted the firm with allegations of overstating its holdings*, which
were made by his research firm Muddy Waters LLC.
In an emailed statement, bcIMC said it joined the suit because “we believe
that our clients and the Canadian marketplace were deceived.”
*"Overstating its holdings" means claiming it had forests where there were none.
Is this the start of a new downturn in forest commodities? Time will tell.
