Skip to main content

The Globe and Mail

Sino-Forest publishes document supporting its claims

A Chinese bureau of commerce has changed website information that it says incorrectly identified Sino-Forest Corp. as an affiliate of a company that sold $70-million of timber rights to the Canadian-based forestry company in 2007.

According to what Sino-Forest identified as an "unofficial translation" of a letter from Hunan Huaihua City Bureau of Commerce, the note said that due "to an administrative error" it had incorrectly identified the timber seller, Huaihua City Yuda Wood Co. Ltd., as a related Sino-Forest company on its website.

The letter, dated June 15, apologized for the error and said that Yuda Wood is, in fact, a subsidiary of Sonic Jita Engineering Ltd., a Hong Kong-based company.

Story continues below advertisement

Sino-Forest has appointed a special committee of directors and hired outside experts to investigate allegations from a short-selling firm, Muddy Waters, that it has inflated the value of extensive holdings of timber rights.

The probe is expected to take months because there is little public information about the value of timber rights and contracts in China. In addition, investigators are analyzing bank records at a large number of banks and branches that do business with Sino- Forest.

Muddy Waters alleged in a report earlier this month that Yuda Wood was an affiliate of Sino-Forest, one of the many convoluted corporate relationships that the short-selling firm alleged allowed Sin-Forest to inflate asset valuations.

Sino Forest has vigorously denied the allegations. Since the report was released, it has seen its stock slide from more than $25 a share on the Toronto Stock Exchange to as little as $2.85. It traded at $3.17 early on Friday.

Report an error Licensing Options
Comments are closed

We have closed comments on this story for legal reasons. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

Combined Shape Created with Sketch.

Combined Shape Created with Sketch.

Thank you!

You are now subscribed to the newsletter at

You can unsubscribe from this newsletter or Globe promotions at any time by clicking the link at the bottom of the newsletter, or by emailing us at privacy@globeandmail.com.