TRE - Sino-forest put.

[MrB]

Please read my post carefully, because I was not saying it is not a fraud. I have no opinion on that point.

 

As an aside: The question is always what was in the price at the time and some people obviously thought "what you could get your hands on" was in the price. I don't think it is a coincidence that Chandler saw value; he is originally from New Zealand.

 

For valuation purposes I assumed it was a fraud, but coming from the bond side could not get the numbers to what I require. It was ballpark, but provided no margin of safety. The number I may have been missing was the cash. I could not locate where it was sitting "legally", which was very likely a consequence of resources. However, Fairfax and Chandler, might have been able to add in that number which would have firmed up the investment case.

 

To tie a ribbon around it: It is plausible that there was a point where you could have established a margin of safety, even it was/is a fraud.

[Guest Hester]

Has anyone read the report process? http://www.sinoforest.com/schedules.asp

 

I just finished reading the report this morning. There were parts that had me laughing pretty hard. The idea that this report exonerates Sino Forest is beyond absurd. In fact some parts are incriminating.

 

Ok, My three favorite paragraphs: (my bolding)

 

__________________________________________________________________________________________________________

#54: (about reviewing emails of senior management)

 

"The extent of historical electronic data (e.g. emails) at the Guangzhou office where two of the senior members of Management are located (CHEN Hua and Albert ZHAO) was almost non-existent. There was no backup of the email server (according to Management, the email and file servers were not being backed up at this location). The earliest email retrieved from Ms. Chen and Mr. Zhao’s computers and servers was dated June 10, 2011. It is to be noted that the IC Advisors attended at the aforementioned office on June 13, 2011 for data preservation but access to the company servers and IT staff was denied by Ms. Chen. Subsequently, on June 15, 2011, the IC Advisors were provided access to commence data preservation."

 

________________________________________________________________________________________________________

#83: (About the process of confirming Timber holdings. It is long so I condensed it to the best parts, although the whole thing is a giant red flag)

 

There are a number of factors which have affected the forestry bureau visits and confirmation process:

(i) Management did not provide a comprehensive list of plantation assets which reconciled to its financial statements until June 23, 2011;

 

(ii) Shortly after the MW allegations, Management, on its own initiative,caused all forestry bureau confirmations to be relocated from their various locations throughout the SF organization to Guangzhou. This resulted in delay in these documents being made available to the IC Advisors.Management explained the forestry bureaus wanted the confirmations returned as they may have exceeded their individual authorities in confirming certain rights. However, the confirmations were not returned to the forestry bureaus and were sighted by the IC Advisors in the offices of Chinese counsel to SF;

 

(vii) In all four instances where new confirmations were obtained, the forestry bureau or other parties who issued the confirmation did not sign the new form of confirmation as sought by the IC Advisors but instead prepared their own versions whereby ownership is not confirmed and only a contractual arrangement between SF and its Supplier is recognized;

 

(xi) Certain forestry bureaus have deferred or not permitted the IC Advisors’ requests to access the plantation rights registries. Others have advised they have not yet established a searchable registry of plantation rights. The forestry bureaus also indicated they do not issue new PRCs for the transfer of standing timber alone. As such, the IC Advisors have been unable to confirm the existence of the PRCs during the IC Advisors’ visits;

 

(xii) In some instances, forestry bureaus would not issue the new confirmations using their letterhead, which is inconsistent with prior practices.

 

(xiii) Certain forestry bureaus have given few details as to what due diligence processes they have undertaken before issuing both the existing confirmations and the new confirmations.

 

(xiv) At a meeting at Hunan FB #1 on September 2, 2011 to validate the authenticity of the existing confirmations, Management represented a forestry bureau official to be the Forestry Bureau First Vice Chief when in fact this individual was no longer in the position of Vice Chief, and had been paid by SF for several months prior to the visit to act as a consultant for SF. The IC Advisors understand this meeting was recorded by SF employees, but have not been provided with a copy of the tape. "

___________________________________________________________________________________________________________

 

#139

 

"A key concern identified by the IC Advisors was the information from SF that longitude/latitude coordinates of standing timber plantations cannot be obtained from the Company’s surveyor reports. Such reports show GPS coordinates for the village/general area rather than detailed coordinates that would facilitate specific identification and a site-walk/examination."

[Guest Hester]

And then the process memorandum fittingly ends with Sino Forest just kicking the IC advisors out of their office  ;D

 

"On September 29, 2011 the Company requested that the IC Advisors vacate the conference room that they had occupied in SF’s offices and return all access cards to Yosanda Chiang. On September 30, 2011 the cards were returned. In the context of the request tracker noted above, the room was no longer in regular active use by the IC Advisors."

[twacowfca]

LOL your excerpts, Hester.  If that report exonerates them, in fairness they should let Madoff go free.

:P

 

[tooskinneejs]

The Company's press release reads like the company has been cleared.  The actual interim IC Advisor's report contradicts this conclusion in many respects.  Maybe the company is hpping that most people won't read the IC Advisor's detailed report.

[Guest Hester]

LOL your exerpts, Hester.  If that report exonerates them, in fairness they should let Madoff go free.

:P

 

He can take over as their CIO and invest all that cash they have.  :P

[Guest Hester]

The Company's press release reads like the company has been cleared.  The actual interim IC Advisor's report contradicts this conclusion in many respects.  Maybe the company is hpping that most people won't read the IC Advisor's detailed report.

 

I agree, If one follows the media's reports of this, they started out as if this report completely cleared Sino of wrongdoing, and now they are much more skeptical and even cynical. It's as if they first immediately reported after reading the company's PR and after actually reading the report and process later they realize there is a helping heap of bs and reversed their optimistic tone.

[twacowfca]

The Company's press release reads like the company has been cleared.  The actual interim IC Advisor's report contradicts this conclusion in many respects.  Maybe the company is hpping that most people won't read the IC Advisor's detailed report.

 

I agree, If one follows the media's reports of this, they started out as if this report completely cleared Sino of wrongdoing, and now they are much more skeptical and even cynical. It's as if they first immediately reported after reading the company's PR and after actually reading the report and process later they realize there is a helping heap of bs and reversed their optimistic tone.

 

Sadly, you're right.  The online media are supremely interested in being first to get a story out.  The quickest way to do that is to regurgitate a fish tale after swallowing it hook, line and sinker.  Take it from a media guy who sees it all the time.

 

The first reports out are salient and memorable.  The truth that comes out later is often ignored.  A severed finger in the Wendy's chili?  Sudden acceleration accidents in toyota cars?  What's the memory?  What's the rest of the story?

[Liberty]

The first reports out are salient and memorable.  The truth that comes out later is often ignored.  A severed finger in the Wendy's chili?  Sudden acceleration accidents in toyota cars?  What's the memory?  What's the rest of the story?

 

This is very important. WEll said.

[Liberty]

http://www.bloomberg.com/news/2011-12-12/sino-forest-will-miss-earnings-deadline.html

[Guest Hester]

Sino-Forest decided it won’t make a $9.78 million interest payment on its 2016 convertible notes that’s due Dec. 15, the Hong Kong- and Mississauga, Ontario-based company said today in a statement. There’s no assurance if or when the results will be released, it said

 

Bummer. Just a month after the independant committee's report completely exonerated the company of any and all wrongdoing.

[alertmeipp]

Interesting article.

 

http://www.bloomberg.com/news/2011-12-07/sino-forest-may-go-private-seek-merger-as-martin-tries-to-exit-morass-.html

 

 

[Liberty]

http://www.theglobeandmail.com/globe-investor/sinoforest/sino-forest-to-file-for-bankruptcy-protection/article2387148/

[Guest Hester]

Sino Forest announces bankruptcy and a $4 billion lawsuit against Muddy Waters for defamation in the same press release.

 

http://finance.yahoo.com/news/sino-forest-announces-ccaa-filing-161300449.html

[alertmeipp]

I wonder OSC will allow trading on this POS soon or they will keep halting this until all get 0.

[Liberty]

http://dealbook.nytimes.com/2012/05/22/sino-forest-and-executives-charged-with-fraud-in-canada/

 

OTTAWA — The Ontario Securities Commission on Tuesday filed charges against Sino-Forest, a Chinese company that once traded in Toronto, and five of its former executives, saying that the company had overstated its timber resources and misled investigators.

[OracleofCarolina]

Well, I forget all about this stock. I lost a smidge just doing a little speculation in this stock...I know I know..stupid.. But I get a little restless sometimes.

 

Anyway, got some settlement paperwork in the mail today..maybe I'll get enough settlement for a nice lunch at Cracker Barrel..lol

 

Cheers!

[Orange]

Well, I forget all about this stock. I lost a smidge just doing a little speculation in this stock...I know I know..stupid.. But I get a little restless sometimes.

 

Anyway, got some settlement paperwork in the mail today..maybe I'll get enough settlement for a nice lunch at Cracker Barrel..lol

 

Cheers!

 

Keep us updated on if you get anything if you will, because I'm curious.