TORONTO, April 17, 2012 /CNW/ - 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: [email protected], 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.
About Sino-Forest Corporation
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.
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.
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