SINGAPORE April 2 (Reuters) – Singapore-based Richard
Chandler Corp, the largest shareholder in Sino-Forest Corp
, said on Monday that it has proposed a restructuring
plan for the embattled Chinese forestry company.
The investment group said it has assembled a team led by an
Asian forestry expert to oversee its proposal for the
Toronto-listed company, whose stock dived last year after a
short-seller accused it of exaggerating its assets.
“Over recent months Sino-Forest’s business and financial
resources have continued to deteriorate in the absence of a
credible business plan which addresses the significant
governance, leadership, strategic, operational and financial
challenges facing the company,” Richard Chandler Corp said in a
statement.
Sino-Forest announced last week that a Canadian court had
granted it protection from its creditors and its board was
looking to sell the company. The company said around 40 percent
of its bondholders had agreed to back this plan.
Last June Muddy Waters accused Sino-Forest of overstating
its forestry holdings, causing its shares to plunge 70 percent
until regulators stopped them from trading.
Sino-Forest appointed an independent panel to look into
Muddy Waters’ allegations, however its final report published at
the end of January failed to fully address all of the
accusations thrown at the company.
The committee’s report was not able to determine whether
Sino had a proper “arm’s length” relationship with the owners of
land on which it had contractual rights over the timber and
businesses to whom it sold its wood.
Richard Chandler Corp boosted its stake in the company
following the Muddy Waters allegations, and now holds around
19.49 percent of the shares according to Thomson Reuters data.
However in December the investor slammed the company’s decision
to delay its results and demanded the company appoint a new
board.
The investor said in its latest statement that it wanted the
company to make the necessary changes to develop a sustainable
plantation business.
Sino-Forest also announced last week that it was taking
legal action against Muddy Waters, its founder Carson Block and
other unnamed parties, seeking more than $4 billion in damages.
