Sino-Forest postpones tour of its forestry assets

flovestock

Reuters
8:31 AM, E.T. | July 6, 2011
Energy & Resources

Embattled Chinese forestry company Sino-Forest said it is postponing a tour of its forestry assets, as some analysts have currently halted coverage of the company.

The value of Sino-Forest shares (TRE-T 5.29 0.00 0.00%) and bonds collapsed last month, after short-seller Muddy Waters accused the company of fraudulently exaggerating the size of its forestry assets.

The company has denied the allegations and appointed an internal committee of its independent directors to investigate the matter. However a full review is expected to take up to three months to complete.

"Following management's recent conversations with the analyst community who cover Sino-Forest, it has become apparent that many of you have been precluded from resuming coverage of the company and otherwise discussing its affairs publicly until after the independent committee reports," the company said in a statement.

"We do apologize for this change of plans and hope you understand the circumstances that required this change," said Sino's chief executive, Allen Chan, in a letter to analysts and investors.

Sino-Forest had proposed to organize the tour in mid-July, in an attempt to calm investors who fled the stock in light of the Muddy Waters report that was issued on June 2. The company did not provide a new date for the tour, but indicated that it plans to reschedule it for some time in the future.

"We look forward to rescheduling this trip and providing you with an opportunity to speak with management, customers, suppliers and forestry bureaus," said Chan, in the letter.

The Sino-Forest announcement comes a day after the Ontario Securities Commission said it is conducting a targeted review of companies listed on markets it regulates that have a major portion of their business operations in emerging markets.

The OSC has stated that it is investigating the Sino-Forest matter, but it has declined to provide further details.

Shares of Sino-Forest, which fell as low as $1.29 at one point in June, are still down more than 70 percent since the beginning of June.