TORONTO, CANADA - April 17, 2012 -Sino-Forest Corporation
("Sino-Forest" or the "Company") announced today certain
personnel changes. The Company also announced today its
intention to apply to the court, in the application commenced
by the Company under the Companies' Creditors Arrangement Act
on March 30, 2012 (the "CCAA Proceeding"), to enhance the
powers of the court-appointed Monitor, FTI Consulting Canada
Inc.
Sino-Forest announced today that it has terminated the
employment of Alfred Hung, Vice President Corporate Planning
and Banking of the Company, George Ho, Vice President Finance
of the Company and Simon Yeung, Vice President Operations of
Sino-Panel (Asia) Inc., a subsidiary of the Company. The
Company also announced that Albert Ip, who served as Senior
Vice President Development and Operations North East and
South West China, prior to his recent resignation, will not
serve as a consultant to the Company.
Sino-Forest also announced today that Allen Chan, the
Founding Chairman Emeritus of the Company, has voluntarily
resigned from the Company and that David Horsley has resigned
as the Company's Chief Financial Officer but will continue as
an employee of the Company, to assist with the Company's
restructuring efforts.
In late August 2011, Messrs. Hung, Ho and Yeung were placed
on administrative leave by the Company, and Mr. Ip was
requested to act solely on the instructions of W. Judson
Martin, the Vice Chairman and Chief Executive Officer of the
Company. These actions were taken after certain information
was uncovered during the course of the review being
undertaken by the Independent Committee of the Board of
Directors of the Company, established in response to the
allegations made in a "report" prepared by Muddy Waters LLC
that was publicly disclosed on June 2, 2011, and immediately
before the Ontario Securities Commission issued a temporary
cease trade order on August 26, 2011.
On August 28, 2011, the Company announced that Mr. Chan had
voluntarily resigned as Chairman, Chief Executive Officer and
Director but would continue with the Company as Founding
Chairman Emeritus, a non-executive position.
On March 30, 2012, Mr. Ip resigned from the Company for
health reasons but had agreed to serve as a consultant to
Sino-Forest on a part-time basis.
The information identified in August 2011, did not raise
conduct issues in relation to Mr. Horsley. For this reason,
no consideration was given to taking employment action
against him at that time.
On April 9, 2012, the Company announced that it had received
an "Enforcement Notice" on April 5, 2012 from Staff
of the Ontario Securities Commission (the
"Commission"). The Company also announced that it
had learned that Enforcement Notices also were received that
day by Messrs. Chan, Ip, Hung, Ho, Yeung and Horsley. As
previously disclosed, the Enforcement Notice received by
Sino-Forest alleges conduct contrary to ss. 122 and 126.1 of
the Ontario Securities Act and raises conduct issues in
relation to the Company and in relation to the individuals
who also received Enforcement Notices. The Company intends to
respond to the Enforcement Notice that it received.
Following review of the Enforcement Notice directed at the
Company, further discussions with Staff of the Commission,
together with examination of issues identified in the
Enforcement Notice received by the Company, the Board of
Directors of the Company determined that it was in the best
interests of Sino-Forest to terminate the employment of
Messrs. Hung, Ho and Yeung and not to enter into a consulting
arrangement with Mr. Ip.
Following receipt of the Enforcement Notice, Mr. Chan
informed the Board of Directors that he wished to resign as
Founding Chairman Emeritus and as an employee of the Company.
Mr. Chan has indicated that he remains available to assist
with efforts to allow the Company's stakeholders to realize
value in relation to assets located in the People's Republic
of China.
The Board of Directors believes that the nature of the
allegations made against Mr. Horsley in the Enforcement
Notice differ substantially from those directed at the other
individuals who received Enforcement Notices on April 5,
2012. In these circumstances the Board, having consulted with
the Monitor, has determined that it is in the best interests
of the Company to retain Mr. Horsley's services while
allowing Mr. Horsley to step down from his role as Chief
Financial Officer.
Following discussions with the Monitor, the Company intends
to forthwith bring an application in the CCAA Proceeding to
enhance the powers of the Monitor. Among other things, the
enhanced powers will facilitate the Monitor providing
additional assistance to the Company in light of the
personnel changes identified above.
All inquiries regarding the CCAA Proceeding should be
directed to the Monitor, FTI Consulting Canada Inc., via
email at: sfc@fticonsulting.com, or telephone: (416) 649-
8094. Information about the CCAA Proceedings, including
copies of all court orders and the Monitor's reports, are
available at the Monitor's website
http://cfcanada.fticonsulting.com/sfc.
Sino-Forest Corporation is a leading commercial forest
plantation operator in China. Its principal businesses
include the ownership and management of tree plantations, the
sale of standing timber and wood logs, and the complementary
manufacturing of downstream engineered-wood products.
Sino-Forest also holds a majority interest in
Greenheart Group Limited (HKSE:00094), a Hong-Kong listed
investment holding company with assets in Suriname (South
America) and New Zealand and involved in sustainable
harvesting, processing and sales of its logs and lumber to
China and other markets around the world. Learn more at
www.sinoforest.com.
Cautionary Note:
No stock exchange or regulatory authority has approved or disapproved of information contained herein. This news release contains forward-looking information within the meaning of applicable securities laws. The forward looking statements expressed or implied by this news release are subject to important risks and uncertainties. When used in this news release, the words "intends", "expects", "believes", "considering" and "will" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such words. Forward-looking statements are based on estimates and assumptions made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that the Company believes are appropriate in the circumstances. The results or events predicted in these statements may differ materially from actual results or events and are not guarantees of future performance of Sino-Forest. Factors which could cause results or events to differ from current expectations include, among other things: the outcome of examinations currently underway by law enforcement and securities regulatory authorities; actions taken by the court, the monitor or others in the proceeding initiated by the Company under the Companies' Creditors Arrangement Act; actions taken by noteholders, other lenders, other creditors, shareholders, regulators, governmental agencies and other stakeholders to enforce their rights; the outcome of class action or other proceedings which have been or may in future be initiated against the Company; the accuracy and outcome of the results of tree asset testing undertaken by the Company; our reliance on key employees; our ability to acquire rights to additional standing timber; our ability to meet our expected plantation yields; the cyclical nature of the forest products industry and price fluctuation in and the demand and supply of logs; our reliance on the relationship with local plantation land owners and/or plantation land use rights holders, authorized intermediaries, key customers, suppliers and third party service providers; our ability to operate our production facilities on a profitable basis; changes in currency exchange rates and interest rates; the evaluation of our provision for income and related taxes; economic, political and social conditions and government policy in China, the Republic of Suriname and New Zealand, and stock market volatility; and other factors not currently viewed as material that could cause actual results to differ materially from those described in the forwarding-looking statements. For additional information with respect to certain of these and other factors, see the reports filed by Sino-Forest Corporation with applicable Canadian securities administrators. Sino-Forest Corporation disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
FOR INVESTOR INQUIRIES PLEASE CONTACT: BRUNSWICK GROUP
LIMITED
Tel: + 1 646 625 7452
FOR MEDIA INQUIRIES PLEASE CONTACT: BRUNSWICK GROUP
LIMITED
Email: sinoforest@brunswickgroup.com
New York
Stan Neve
Tel: +1 212 333 3810
Hong Kong
Tim Payne
Cindy Leggett-Flynn
Tel: +852 3512 5000
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