External view of Sino-Forest's engineered wood flooring facility in Suzhou
On a conference call Tuesday, analysts wanted to know why Sino-Forest Corp.'s management and directors haven't been in the market buying shares. Not only would it prove that these people support the company with more than just words, it's also a smart financial play because the share price has plummeted and should rebound if the company is cleared of any wrongdoing.
Bill Ardell, who sits on the company's board of directors and is leading the independent audit committee looking into the allegations, took it upon himself to answer. It turns out that the company has been hearing this question quite a bit.
"We've had lots of recommendations from various people that we should be looking at share buybacks," he said. "I can assure that if we had the choice we certainly would at this stage."
Chief executive officer Allen Chan said the same.
What's preventing them from buying? "We've been advised by counsel that we are unable to do so until the examination is completed," Mr. Ardell added.
That Mr. Chan wants to buy isn't surprising, because he runs the company and has now said multiple times that he stands by its audited financial statements. Mr. Ardell is a different story. As head of the independent committee, technically he's supposed to take a neutral stance. The fact that he wants to buy shares could colour his judgement as an 'independent.'
Tim Kiladze