It hasn’t been a good month for Sino-Forest Corp. The Chinese forestry company listed on the Toronto Stock Exchange has been facing a plummeting stock value and distrust from investors since the release of a report by a research company accusing the company of fraud.
A heavy blow came this week when its largest shareholder, Paulson and Co., the hedge fund headed by John Paulson, sold its Sino shares.
Sino’s stock closed the day on Tuesday at $1.99, roughly 90 percent lower than its value in May before the release of the report, by Muddy Waters LLC, accusing the company of exaggerating its assets.
Though Sino denies Muddy Waters’ accusations, investors have nonetheless fled given the uncertainty.
The company’s board of directors has set up a committee to investigate the accusations. The Ontario Securities Commission has also started an investigation into the matter.
Sino was put under more pressure after reports by the Globe and Mail questioned the company’s claimed timber purchasing rights in China.