6 July 2011
To : All Investors and Analysts
Dear Investors and Analysts:
On behalf of the management team of Sino-Forest Corporation (“Sino-Forest’), we are writing to inform you that we are postponing the analyst trip that was previously proposed for mid-July.
When we first proposed the analyst trip on June 6, following the unfounded allegations made by Muddy Waters, LLC, our aim was to showcase Sino-Forest’s forestry assets and business partners to the sell-side and buy-side analysts who follow the company. However, following management’s recent conversations with the analyst community who cover Sino-Forest, it has become apparent that many of you have been precluded from resuming coverage of the company and otherwise discussing its affairs publicly until after the Independent Committee reports on the unfounded allegations made by Muddy Waters, LLC.
Similarly, the Board of Directors and management believe it is appropriate to wait for the Independent Committee to report before commenting further on the issues under consideration by the Committee. In the meantime, management’s overriding priorities are to maintain the operations of the business and to support the work of the Independent Committee and its advisors, and to provide them with the information and access that they require, to ensure that they can complete their work as quickly as possible. We have been advised that, as previously announced, it is likely that the Committee will require at least two to three months to complete its work.
We look forward to rescheduling this trip and providing you with an opportunity to speak with management, customers, suppliers and forestry bureaus and to answer any questions that you may have at that time.
Should you have any questions related to the postponement of the analyst trip, please do not hesitate to call either of us. We do apologize for this change of plans and hope you understand the circumstances that required this change.
Allen Chan Dave Horsley
Chairman and CEO Senior Vice President and CFO
The analysts are 'precluded' from commenting until the independent committee produces its report. These guys have been told by their respective firms to stay on the side-lines for the time-being as they don't want to be held liable if TRE turned out not to be on the up-and-up. I don't think that this news today is at all negative as it leads to believe that it is not the analysts' decision to suspend their coverage of the stock. Don't forget RBC's Paul Quinn's 'OUTPERFORM' recommendation on Friday June 17 before he suspended his coverage on Monday June 20th. Same story with Richard Kelertas from Dundee who defended TRE pounding his fist on the table before suspending his coverage of the company a few days later.
The postponement is not a surprise to me and makes sense under the circumstances.
It will come back as Ontario Securities Commission said it is conducting a targeted review. I am guessing Wellington wants the rest of the company. HE already knows whats going on...... You will see another release when the company and Wellington has bought from the week hands. Good chance to buy a few.