Pile of crap: suspending coverage

Posted by John McDermott on Jun 20 15:52.

Timeline courtesy of Sino-Forest’s erstwhile supporter, Dundee Securities:

June 1:

Sino-Forest has a 16-year track record of operations, during which time it repeatedly completed debt and equity offerings without once being the subject of legal concern. The due-diligence required in these fund-raising activities is extremely strict and comprehensive, and every offering requires an army of accountants, underwriters, consultants and lawyers. The companies that have been coming under fire recently in China don’t have the history of operations and haven’t undergone nearly the amount of rigorous due-diligence that Sino has.

(June 2: Muddy Waters releases its report.)

June 6:

Based on our review and discussions with management regarding the company’s assets and operations over the past several years, to the best of our knowledge we believe that the allegations cited in the short-sellers “research report” are false and without merit.

Sino-Forest has established an independent committee to deal with the accusations accordingly. Although we expect that the special committee’s conclusions will support Company management fully, we are expecting further clarification on this process and hope that it comes quickly.

June 7:

“We are going to provide you with some information on why Muddy Waters research is a pile of crap

June 20:

We are suspending coverage on Sino-Forest (TRE-T), effective immediately. Effective immediately our past ratings, target prices, valuations and estimates should no longer be relied upon. Until such time as the Company has made public the findings of the Board appointed Independent Committee together with the assistance of its external advisors including legal council Osler Hoskin & Harcourt LLP and the accounting firm PricewaterhouseCoopers and we have had time to review and analyze these findings we are not in a position to comment on or otherwise speculate on matters as they relate to the business practice or valuation of Sino-Forest.

This entry was posted by John McDermott on Monday, June 20th, 2011 at 15:52 and is filed under Capital markets, Commodities. Tagged with , , , .

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