Sino-Forest runs its business through 58 holding companies incorporated in the British Virgin Islands.
FORBES: Chinese Stock Alarm? Sino-Forest May Be the Best of the Bunch
Sino-Forest has denied charges, but its defense has been tardy and, to date, unconvincing.
This was before Muddy Waters, a research firm, called Sino-Forest a Ponzi scheme.
FORBES: Sino-Forest Eyes 'All Options' For Shareholders, But Doubts Persist
Muddy Waters stalking Sino-Forest is like a lion chasing a herd of zebras.
Yes, Muddy Waters has a short position in Sino-Forest, and thus it is talking its book.
If you want to invest in China, Sino-Forest appears (or appeared) to be among your best bets.
FORBES: Chinese Stock Alarm? Sino-Forest May Be the Best of the Bunch
Sino-Forest tumbled in June after Carson Block, a short seller, said the company exaggerated its timber holdings.
FORBES: Sino-Forest Eyes 'All Options' For Shareholders, But Doubts Persist
Sino-Forest uses informal leasing agreements with government forestry agencies rather than clearly defined legal arrangements based on legislative mandates.
FORBES: Chinese Stock Alarm? Sino-Forest May Be the Best of the Bunch
Chinese regional forestry officials asked Sino-Forest to keep leasing and sales agreements confidential.
FORBES: Chinese Stock Alarm? Sino-Forest May Be the Best of the Bunch
Confidence in Chinese stocks has been stirred and shaken this month as several, including Sino-Forest, have faced fraud allegations.
FORBES: Paulson Pulls Out Of Sino-Forest, Cites $750 Million Loss
In the case of Sino-Forest, its shares in Toronto were suspended in August as regulators began to probe its disputed accounts.
FORBES: Sino-Forest Eyes 'All Options' For Shareholders, But Doubts Persist
Sino-Forest is a Wholly-Owned Foreign Enterprise that harvests, processes, and sells wood from leased or owned tree plantations in various Chinese provinces.
FORBES: Chinese Stock Alarm? Sino-Forest May Be the Best of the Bunch
In the wake of the initial charges against Sino-Forest, the shorts have gone on to target small China-linked issuers as a class.
But nothing more substantial, and certainly not the detailed skewering that helped to drive Chinese stocks like Sino-Forest to the wall.
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One of the most popularly reported fraud cases involving a Chinese company was timberland firm Sino-Forest, traded on the Toronto Stock Exchange.
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In 2011, a number of institutional investors criticized Sino-Forest for not following globally recognized best practices when it comes to corporate governance.
Paulson has taken major losses on his investments in financials like Citigroup and Bank of America, and separately in Sino-Forest.
Sino-Forest, the forestry company whose stock plunged in June amid fraud allegations, has become a byword for questionable Chinese listings on Western exchanges.
FORBES: Sino-Forest Eyes 'All Options' For Shareholders, But Doubts Persist
Instead of written contracts enforceable in a recognized court of law, Sino-Forest operates on the basis of personal relationships, cultivated by its senior management.
FORBES: Chinese Stock Alarm? Sino-Forest May Be the Best of the Bunch
Citron is treading the same path as short-seller Muddy Waters, which scored a bullseye in exposing fraud at Toronto-listed Sino-Forest, and more mixed results elsewhere.
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Earlier this year, Muddy Waters released a report on Chinese timber company Sino-Forest, listed in Canada, arguing it engaged in fraud by overstating assets and revenues.
FORBES: Focus Media Run For Benefit Of Insiders, Muddy Waters Says
Chinese officials will also take home a lesson from Sino-Forest.
FORBES: Chinese Stock Alarm? Sino-Forest May Be the Best of the Bunch
Sino-Forest management introduced a person to auditors as the vice-chief of the forestry bureau of Hunan province, who was no longer in that position but was a paid consultant.
FORBES: Chinese Stock Alarm? Sino-Forest May Be the Best of the Bunch
On June 2, Muddy Waters, a short-selling firm, sent the stock of Toronto-listed Sino-Forest Corp. tumbling after charging the Chinese company with substantially misrepresenting its rights to timber acreage and massively overstating revenues.
The Sino-Forest case reveals that business is done in China through informal agreements with state or party officials, who grant access to licenses, resources, and markets only if they are paid under the table.
FORBES: Chinese Stock Alarm? Sino-Forest May Be the Best of the Bunch
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