Richard Chandler, owner of a 19.49 percent stake, according to data compiled by Bloomberg, said Sino-Forest needs to rebuild based on good governance, entrepreneurship and conservative financing, according to an e-mailed statement from the Singapore-based private investment group.
Sino-Forest Corp. filed for bankruptcy protection as part of a plan that may see the Chinese timber grower sold to bondholders, nine months after it was accused of fraud by short seller Carson Block.
“Sino-Forest faces a range of complex problems,” David Walker, an adviser on the forest products industry appointed to lead the restructuring team, said in the statement. “A successful restructuring which builds a long term sustainable plantation business will take a considerable amount of time and a strong team to drive the process.”
Investors in Sino-Forest, once the largest Chinese forestry company by market value, lost about C$3.3 billion ($3.3 billion) since Block’s research firm Muddy Waters LLC published a report June 2 accusing it of overstating earnings. The shares plunged 74 percent before being suspended Aug. 26 amid investigations by Canadian regulators and police. Allen Chan, the company’s co- founder, stepped down as chief executive officer in August.
Bennett Jones is Sino-Forest’s Canadian legal adviser. Osler Hoskin & Harcourt LLP is Canadian legal adviser to its board. Moelis & Co., Goodmans LLP and Hogan Lovells LLP are advising the group of bondholders.
The cases are: In the Matter of a Plan of Compromise or Arrangement of Sino-Forest Corp. (TRE), CV-12-9667-OOCL, and Sino- Forest Corp. v. Muddy Water LLC, CV-12-9666-OOCL, Ontario Superior Court of Justice (Toronto).
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