Sino Forest's largest shareholder proposes restructuring plan
SINGAPORE (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.
(Reporting by Rachel Armstrong; Editing by Richard Pullin)
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