No log exports this week

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. 

Embattled Sino-Forest faces more uncertainty as OSC alleges fraud

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.