Comments on: Making sense of Sino-Forest A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: WojKwasi Fri, 08 Jul 2011 04:30:26 +0000 Great article Felix. If anyone else wants to see the documents, the virtual data room can be accessed here:

By: advocacybz Tue, 05 Jul 2011 18:48:37 +0000 Wellington going in and now it may become a short squeeze, that would a pleasurable event to watch.

By: advocacybz Tue, 05 Jul 2011 18:45:24 +0000 The disclosures from all SHort Selling promoters such as Muddy Waters says pretty much all one needs to know, the motivation is to tank the stock and push it down regardless of how that is done. It is simply another form of manipulation comparable to insider trading on the up side. Below is the disclosure, pretty much says that none of the information can be taken as a implied warranty or with any concern as to correctness, basically it is a license to say whatever seems plausible with no regards to accountability.

Use of Muddy Waters LLC’s research is at your own risk. You should do your own research and due diligence before making any investment decision
with respect to securities covered herein. You should assume that as of the publication date of any report, Muddy Waters, LLC (possibly along with or
through our members, partners, affiliates, employees, and/or consultants) along with our clients and/or investors has a short position in the stock (and/or
options of the stock) covered herein, and therefore stands to realize significant gains in the event that the price of stock declines. Following publication
of any report, we intend to continue transacting in the securities covered therein, and we may be long, short, or neutral at any time hereafter regardless
of our initial recommendation. This is not an offer to sell or a solicitation of an offer to buy any security, nor shall any security be offered or sold to any
person, in any jurisdiction in which such offer would be unlawful under the securities laws of such jurisdiction. To the best of our ability and belief, all
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However, such information is presented “as is,” without warranty of any kind – whether express or implied. Muddy Waters, LLC makes no representation,
express or implied, as to the accuracy, timeliness, or completeness of any such information or with regard to the results to be obtained from its use.
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By: MIKESP Sun, 12 Jun 2011 03:57:34 +0000 onathan Ratner Jun 10, 2011 – 9:28 AM ET | Last Updated: Jun 10, 2011 10:30 AM ET

RBC Capital Markets analyst Paul Quinn expressed his support for Sino-Forest Corp. in a note to clients Friday morning, saying the stock offers a compelling valuation based on estimates for the company’s timber assets.

He left his Outperform rating and $27 price target on the TSX-listed commercial forest plantation operator unchanged. The stock has fallen approximately 70% since short seller Muddy Waters accused Sino of fraud in a June 2 report.

Mr. Quinn and associate Hamir Patel cited several reasons in favour of Sino’s business case.

First, they were able to confirm business registration records for the company’s Hong Kong-listed subsidiary (64% owned) Greenheart in Suriname. However, during Muddy Waters’ conference call on Monday, the research firm alleged that it was unable to find any such records in the South American company.

Muddy Waters’ report also alleged that Sino could not have harvested $231-million worth of fibre in China’s Yunnan province since 2.3 million cubic metres exceeded Lingcang city’s annual quota. Yet Mr. Quinn noted that Sino sold the trees as standing timber – as opposed to harvesting them – thereby not being limited by the quota.

Muddy Waters also suggested that Sino only has 20,000 hectares of timber in Lingcang. However, Sino’s data room shows purchases outside the city in Yunnan province and reported ownership on 186,700 hectares there at the end of 2010.

RBC also highlighted Muddy Waters’ dependence on 10,000 pages of documents from China’s State Administration for Industry & Commerce. Mr. Quinn said simply adding up the financials of each subsidiary does not equate to consolidated financials under International Financial Reporting Standards (IFRS) due to differences in accounting.

“In addition, it appears easy to miss subsidiaries in reconciling total timber holdings,” the analyst said.

Finally, RBC pointed to the estimated US$3.1-billion value of Sino’s timber assets at the end of 2010 from consulting firm Poyry. However, Mr. Quinn believes it penalizes the company’s valuation by using an unrealistically long 10-year period to harvest 93.2 million cubic metres of timber. He thinks a liquidation scenario would more likely see the timber harvested in a five-year period and puts a value of US$4.1-billion on the assets.

“We also note that our liquidation value does not account for the value of Sino’s manufacturing sites, Greenheart interest, and the value of further asset
acquisitions that could be realized just under existing master agreements,” the analyst said.

By: Foolish_Jordan Thu, 09 Jun 2011 10:59:22 +0000 @KidDynamite: If we take it as granted that either one side or the other has broken the law, we might note that the relevant law is American (or Canadian?). The party who lives in Hong Kong but regularly travels to America would seem to be at risk of arrest. The party who lives in China would seem to have no such risk.

By: MIKESP Wed, 08 Jun 2011 05:46:39 +0000 TIM KILADZE
17:00 EST Tuesday, Jun 07, 2011
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Carson Block, the now notorious author of the Muddy Waters report that aimed to take down Sino-Forest Corp. , held a conference call on Monday night to support his research. On Tuesday, Dundee Securities analyst Richard Kelertas, who vehemently disagrees with Mr. Block’s allegations, decided it was fitting to do just the same.

Mr. Kelertas didn’t mince his words. From the get-go his goal was to explain “why Muddy Waters’ research is a pile of crap” and he went about his attack by addressing specific issues that Mr. Block has raised.

The two key topics were Sino-Forest’s “authorized intermediaries” (AIs), and the documents that Mr. Carson allegedly uncovered from China’s State Administration for Industry and Commerce (SAIC).

Regarding the AIs, Mr. Block has said that they are used to concoct revenues and that they make it hard to track cash flows. In his rebuttal, Mr. Kelertas noted that AIs are common for companies that operate in China, and that Siemens has more than 2,000 of them. That still doesn’t answer why four of the AIs haven’t been named, but this wasn’t his point. Mr. Kelertas wants investors to know that AIs are nothing to be scared about and that they aren’t something the company created to conceal any wrongdoing.

As for the SAIC documents, Mr. Block refers to the ones he obtained in an attempt to prove that the company has lost money in certain areas and that many of its assets are overvalued. However, Mr. Kelertas noted that each of Sino-Forest’s subsidiaries must file a different SAIC, and that they must all be obtained in order paint a clear picture of the company because each report tells a different piece of the total story.

Mr. Block has also mentioned that the SAIC documents don’t match Securities and Exchange Commission documents. That happens, Mr. Kelertas said, because the SAIC files don’t aggregate all of the different holding companies like the SEC ones do. Mr. Kelertas was resolute in his support. “We’ve spoken to the company on about 20 occasions since this has broken,” he said.

And unlike Mr. Block, who only recently started looking at Sino-Forest, Mr. Kelertas said he has covered the name since 2004 and has known the company since 2000. Moreover, he noted that since David Horsley left the board of directors to become chief financial officer in 2003, Sino-Forest’s level of corporate governance has been very high.

“All indications are that there are no fraudulent activities, no overstatements. We believe in the company. We trust the company after they have come through with various disclosures,” Mr. Kelertas said.

By: MIKESP Wed, 08 Jun 2011 05:35:47 +0000 Are there any lawyers willing to sue Muddy Waters on behalf of Sino shareholders for causing such misleading allegations without any real evidences .Muddy Waters may have hired a bunch of crooks to make them up knowing a lot of people are ignorant in how difficult in dealing with Chinese Gov’t

By: MSwizzle Wed, 08 Jun 2011 04:05:24 +0000 Also, the analyst works for a firm that probably put a lot of client capital into TRE, he motives are just as questionable as Block’s.

By: MSwizzle Wed, 08 Jun 2011 03:51:59 +0000 Very suspicioous, I have a few reasons…

–500,000 shares sold by insider in the past 12 mo/none bought up. Perhaps the website is not up to date, however. _page=87444&qm_symbol=TRE:CA

–AR has more than doubled in the last year… It has gone up almost as much as net income fo 10′. t_2010_AR.pdf

–The Globe says they get 40-50% margins by simply holding forests for two years…

“Mr. Chan and Mr. Horsley denied all of these allegations. They said Mr. Block has “misunderstood” Sino-Forest’s current business, which involves buying plantations of trees in China, holding them for two or three years while they increase in value, and then selling them for a profit. Sino-Forest’s margin on such transactions has been between 40 per cent and 50 per cent.”

Those margins are ridiculous, I have a lot of trouble believing them. estor/sino-forest-angry-stunned-and-frus trated-at-allegations/article2050175/

Seems pretty funny. I can’t wait to fine out what happens, luckily I can poke at it from across the room.

By: mcjava Tue, 07 Jun 2011 17:37:34 +0000 They won’t post supporting evidence against Allegations from Short Seller because they don’t have any. As a foreigner with business in China, it is not possible to have any sales of any scale without issuing VAT invoices…..

China is an incredibly competitive market with incredibly tight margins for almost every industry, wood products in particular. Anyone that thinks a company “owning” forests can make huge margins is only fooling themselves.