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Sino-Forest upheaval thrusts Martin into spotlight

Judson Martin of Sino-Forest.

Jerome Favre/Bloomberg

Judson Martin once referred to Sino-Forest Corp. as a fun job. Serving as a director of the Canadian-listed company that operates in China was a chance to play an influential role in a growing international business, he told a Bay Street acquaintance.

He would probably choose a different word these days. The abrupt resignation of Sino-Forest chairman and chief executive officer Allen Chan this weekend, amid allegations of fraud and misconduct, has left Mr. Martin as the man who must now guide the beleaguered forestry company through its most perilous chapter.

Mr. Martin has assumed the CEO job at Sino-Forest after serving as executive director for a year and as a non-executive director for three years prior to that. William Ardell, who is leading the board's internal investigation into whether Sino-Forest's vast forestry holdings were misrepresented to investors, will serve as chairman.

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The move is a strange turn for Mr. Martin, a 55-year-old Canadian executive whose experience lies not in forestry, but as an accountant who cut his teeth in real estate finance and the entertainment sector.

But in making Mr. Martin the CEO, the board is putting a Canadian face at the helm to steer Sino-Forest through an investigation by the Ontario Securities Commission. The regulator halted the company's shares last week, warning of "serious" but "unproven" allegations of misstatements by the company, which has offices in Mississauga and Hong Kong.

Mr. Martin's job will be centred on co-operating with the probe at a time when the credibility of Mr. Chan and others associated with the company is in tatters. His role is less about strategic initiatives than it is about assisting the OSC in determining whether Sino-Forest exaggerated the size of its forestry holdings in China.

He is described by acquaintances in Canada as a numbers person who is able to weather times of unusual upheaval. Mr. Martin got his start in real estate finance in the early eighties, and served as an executive at several companies over the next 20 years, including Trilon Securities Corp., Trizechahn Corp. and Brookfield Development Corp.

But it is his experience at Alliance Atlantis Communications Inc., the Canadian broadcasting and production company that ran into accounting difficulties close to a decade ago, that analysts believe will be the most relevant.

After Toronto-based Alliance Atlantis decided to exit the production business, it stumbled through several years of accounting problems associated with the move, including complications associated with numerous asset sales. Mr. Martin, who had served as chief financial officer from 1999-2002, before departing to run a real estate investment trust, was brought back as chief financial officer in 2003 to help straighten out the books.

Given that Mr. Martin has taken sabbaticals in the past decade to deal with health issues, including a respiratory condition that nearly killed him, assuming the job as Sino-Forest CEO is a puzzling move, particularly since he's described as wealthy enough that he doesn't need to work.

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But when the board went looking for a Canadian executive to work with regulators, Mr. Martin was an obvious choice. He also served as CEO of Sino-Forest subsidiary Greenheart Group Ltd., and his role at the two companies paid him about $985,000 last year, including a base salary of $292,000 and a bonus of $693,000.

His family also has a significant stake in getting to the bottom of the allegations. Mr. Martin holds about 6.8 million options on Sino-Forest shares, according to regulatory filings made this week, and his spouse holds 30,000 Sino-Forest shares. Last summer that stake was valued at nearly $540,000, but would have plunged to $61,000 by June when Sino-Forest shares reached their lowest point.

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About the Author
Senior Writer

Grant Robertson is an award-winning journalist who has been recognized for investigative journalism, sports writing and business reporting. More

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