The report alleged Sino-Forest overstated timber holdings and revenue through opaque "authorised intermediaries" that left no verifiable paper trail. Trading was halted, the CEO resigned, and the company filed for creditor protection.
We did not write this report. We catalogued it. The underlying research was published by Muddy Waters Research. The Forensic Ledger does not endorse its conclusions. Always read the original document.
The structure was the fraud
Sino-Forest bought and sold standing timber through authorised intermediaries — a structure that conveniently meant no VAT invoices, no title transfers and no independently verifiable counterparties.
What the fieldwork showed
- Purchase and sale volumes in Yunnan that local bureau records could not support
- Undisclosed related parties on both sides of asset transactions
- Cash constantly raised from capital markets while operating cash never came home
The conclusion
A capital-markets machine dressed as a forestry company: proceeds from each raise funded the appearance of growth from the last.
subsequent events
- 2011-06-02Report published; shares collapse
“Sino-Forest is a multibillion-dollar fraud that is a Ponzi scheme.”
- 2011-08-26Ontario Securities Commission halts trading
- 2012-03-30Company files for creditor protection
Source — https://muddywatersresearch.com/
Not investment advice. This dossier summarizes a third-party short report. The Forensic Ledger did not produce the underlying research and does not endorse its conclusions. Nothing here is a recommendation to buy, sell, or hold any security. Always consult the original source and a licensed professional. See our full disclaimer and source-citation policy.