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Rabbitisrich It was a couple of weeks ago and may have been in the Globe & Mail but I am not sure. I believe that the reasoning behind this was that some of the analysts felt it would be premature to make the tour before the PWC report was released. Given the fact that PWC are doing an investigation into the company one might think that Sino’s hands may be tied until the report is released. Since their whole business has been called a fraud, until the independant report is produced I doubt analysts would trust anything Sino says at this point. As far as analysts dropping coverage, are they dropping/stopping coverage or are they just suspending coverage until the PWC report comes in so that they know the results. I’m sure analysts would be reluctant to express any opinions until they know if Block’s report holds water - muddy or not. There is some good information on the SEDAR site and the Gengma situation is explained there. See “other” and "News release - English", both June 20. http://www.sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00001894

Not at all. I am simply saying that we have two sides of this question and I feel that one side is simply more credible than the other. On one side we have one individual (and MW consists of one person, Carson Block). Block’s credentials are somewhat dubious and he has stated that Sino is a complete fraud and a multi billion dollar Ponzi scheme. By no stretch of the imagination is he an unbiased analyst. He is a self styled short seller who’s goal is to drive Sino’s share price down. Furthermore, he promised a release of further supporting evidence of his claims that he has never produced. For those reasons I think that, at the very least, he has overstated his case for his own gain and therefore I view his assessment of Sino with a lot of suspicion. The other side is simply composed of two entities who have said nothing. But actions speak louder than words. One has just purchased 11% of the company and the other has increased its holdings to a similar level. Now if they believed Blocks assessment of Sino, would they have done that? They have the ability to have far more detailed research into Sino’s operations than I do and obviously they believe that Block’s report is wrong or at least vastly overstated.

Correction on Chandlers purchase. I believe that they only increased their holdings by 10% and purchases about 2.5 million shares yesterday. Still their net ownership stands at slightly less than 11% and it would seem to be a positive sign since they are buying rather than selling.

Libor, I was quoting from Hester and that was not aimed at you. I think that you and I are the same page, it is just a matter of degree. On the credibility factor, MW also released another report on a different company (I forget which one) and it was shown to be false. If he accurately uncovers fraud, more power to him, but if he tries to take a company down with innuendos and false or misleading information, then that is a whole different story. Also, I don't care how big a company is, no company blows $100,000,000 without a good possibility of return. Yes it may be small potatoes on the grand scale of things, but don't you think that if they lost $100,000,000 that some people are going to have to account for that? Companies just don't work that way. A hundred million or so may not be a significant portion of their net worth, but I can assure you that it does matter to some department and in turn some employees. "Sorry boss but I just blew a hundred mil on that Sino deal but it's no big deal cause we've got lots more." Don't think that would cut it. And now that another fund has come in at over $4.00 wouldn't you expect that they feel the company is worth much more?

"Besides if MW went the legal route, some other firm would eventually short the stock, write research and end the fraud much quicker than the legal process ever could." Once again you make the assumption that Block's allegations are correct. What, other than Block's say so and a belief that all Chinese stocks are frauds, leads you to this conclusion? Just a note of interest to all those who put so much faith in Carson Block. Do you just ignore the fact that Wellington has acquired 11.5% of this company. Do you really think they would do that if they believed this was a multi billion dollar Ponzi scheme? And now it has just been announced that Richard Chandler Corp has just purchased 10.9% of the company at about $4.06 per share. So, going back to the credibility issue, who do you believe? These separate funds, who have jumped in with both feet and invested hundreds of millions of their own money or Carson Block?

I guess I don’t do a good job of making a point. Point: Why do you all accept what Block says and nothing that Sino says? Maybe you don’t like Sino, maybe you don’t like Chinese stocks or China in general. I don’t care. My question is simply why some here are so willing to accept Block’s accusations at face value and yet completely dismiss anything Sino says. I am not saying Block is wrong. I am not saying Sino is right. The truth may lie somewhere in between. But I do find it a little hard to swallow Block’s statement that Sino is a milti-billion dollar Ponzi scheme. Believe what you may, but if you are going to base your opinions on what someone else says than that individual’s credibility becomes very important. Couple of comments: “objective evidence” Haven’t seen any, let’s wait for the PWC report. “Nobody should base investing judgement on anyone's reputation, good or bad. I'll stick to the Sino specific facts.” Seriously?? And yet you believe Block’s unsupported accusations? And what ‘facts’ are you sticking to? “However, Globe and Mail uncovered supporting evidence of misrepresentation and TRE cancelled an investor meeting.” Okay, well firstly regarding G&M ‘supporting evidence’. Did you not read the reply to that filed by Sino on SEDAR? Secondly, to say TRE cancelled the investor meeting is a distortion of the facts. To clarify matters, it was an analyst’s tour in China that was postponed. But it was the analysts that asked Sino to postpone the tour. Yes it was Sino's tour and therefore technically only Sino could cancel it but it was the analysts who asked that it be postponed. To simply say TRE cancelled the tour is misleading. Analysts correctly wanted to wait for the PWC report? And furthermore I would hesitate to use Chou and Watsa’s name in the same sentence as Block. If anyone thinks that their backgrounds are similar than perhaps they haven’t researched these parties very well. PS. Does it not concern anyone that Block serves his own interests by driving down the share price? Do you not think that may effect his credibility and objectivity?

Claphands - “(1) Financial expertise, from his father and schooling.” By his own admission he spent most of his time partying and had a low grade average. “(2) understanding of chinese culture, from working in Shanghai and living in Asia “ Reportedly fraud is rampant in China. Block portrays himself as an expert on fraud in China. He seems to have mastered the craft. After a tour of Orient paper he reportedly demanded payment of $300,000 to write a positive report. When he didn’t receive it he published a very negative report. “(3) understanding of business practices in China, from setting up his business in Shanghai “ Again by his own admission, he ran a small storage company - Love Box - that is essentially broke. “(4) ability to communicate his ideals effectively with investors, from his dad who runs an equity research firm “ Check his father’s company website. Check the address for his research firm. Then run it through Google Earth. You will see that it is a residential condo in California. Something like the firm of Muddy Waters, with no employees or fixed address. “(5) an irreverent attitude toward authority, not necessary for short sellers but seems to be a running streak. “ Does he strike you as a reputable person on who’s judgement you would base investment decisions?

“ I do find it odd that so many on this board are so vehemently anti-shorts” If you look at the history fo Fairfax (this is a Fairfax based board) and their experience with some specific hedge funds who used unsavoury tactics (to put it mildly), you will see how some might be predisposed to have a bad view of shorts. However, Fairfax also made a lot of money in essentially shorting the mortgage industry (CDS). Now while I really have a lot of trouble with the whole concept of naked shorts being allowed, I don’t have much problem with individual investors shorting stocks. It is when large investors unite or hedge funds get involved in intentionally trying to drive stock values down of an otherwise good company that the practice begins to smell. Add to that Parsad’s comments on the lack of regulation and you can see why “short” becomes a bad word. In the case of Sino, if Carson Block proves to be right he has done the investment community a service. However, if it turns that he simply made up most of his allegations simply for personal gain, would that not leave a bad taste in your mouth? If that turns out to be the case he will have cost investors billions in loses and have caused serious damage to a legitimate company. And then to add insult to injury, the company has almost no recourse or defence against these practices. One final comment - people like Block would not have the influence they do without trigger happy people who are so willing to immediately believe everything negative that they read.

“If I were a Chinese Regulator in the Securities Market I would be getting very concerned that the baby is going to get thrown out with the bath water. If this persists it will kill legitimate foreign investment in China for years to come. ” Absolutely, and I think they have now gotten the message. Anyone who thinks these guys are stupid needs to rethink. They may not be as well organized as much of the rest of the world and they may do business in a different way but look at what they have accomplished in such a short period of time. Look at the Sino situation. Are some people are letting prejudices interfere with their good judgement? Does anyone really still believe Block’s statements that is a complete fraud and a multi Billion Ponzi scheme? It is nearly seven weeks since Block’s report came out. In that time Block has either backtracked (from a “multibillion-dollar Ponzi scheme,” to “an overstatement of several hundred million dollars”) or been proven wrong (misunderstanding of Sino’s business and standing lumber). And he has yet to provide the further details he promised. On the other hand, Where are the management resignations? If there was imminent exposure of fraud, wouldn’t you expect to see some directors and management be jumping ship? Where are the disgruntled employees offering to provide evidence against Sino? With nearly 4,000 employees wouldn’t you think someone would have spilled the beans by now? Sino has been criticised by some here for doing nothing in their own defence. But they have posted over a dozen news releases and filings on SEDAR explaining in detail their defence and re-affirming their financials. When guys like Horsley sign off on submissions to SEDAR do they not risk serious consequences if that information prove wrong? Would he still be doing this if PWC were about to expose major fraud? http://www.sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00001894 There has been a big issue made of the fact that most analysts have suspended coverage. Why is that unexpected or a suggestion of fraud? There is an extensive, thorough, and independent audit coming out shortly. Why is it any surprise that they are waiting for that report before commenting further? As Uccmal says “It may become a value investors wet dream one day.” Perhaps that day is closer than we think. There may be some dirt here, but consider the situation if Block is discredited and shown to be some sort of clown out to make a quick buck. It may take a while for legitimate China stocks to recover from this but is that not the value investor’s opportunity?

Yes, and in case anyone misinturprets my position on Block and fraud, I want to make it clear that I hold anyone in the highest regard who uncovers actual fraud, whether they be an investigative journalist or a whistleblower. They are very brave people and deserve much more respect than they get. Should Mr. Block turns out to be right in all his accusations and this turns out to be a mulit-billion Ponzi scheme, then I would grudgingly have some respect for him. However, if he is mearly throwing accusations around hopeing that something sticks and therby cost a lot of people a lot of money as well as hardship for a legitimate company while he makes money for himself, then he is truly a- cockroach.

I am not defending Sino Forest but I am amazed that so many people, would put so much faith and risk so much money on Mr. Block’s completely unsupported accusations. Even if Block turned out to be right, is the market so fragile that a clown like Block can cause supposedly intelligent investors to dump billions in stock simply on his say so? With that in mind I would make the following remarks. “The founder of Muddy Waters LLC” That sounds rather prestigious for a ‘firm’ that has a dubious reputation, no employees, no office and no fixed address. “I know a lot more about … China than these [analysts] will ever know,” The guy is 35, runs a self storage business that he admits is barely solvent. “This is the big leagues,” ... “These guys {Sino] have a lot of money.” Oops, I thought he said they were a fraud and Ponzi scheme worth zero? “[Canada] is a totally different market where nobody knows us and we don’t have credibility.” Precisely where exactly does Mr. Block have credibility? “We know there will be immense pressure for somebody to be prosecuted so we have to be very careful to make sure we do not overstep. We know with some bad breaks we might be looking at the wrong end of that gun” Well if the shoe fits.... “On disguising himself in a one-on-one meeting with Sino-Forest’s head of investor relations:” “I even combed my hair forward for a “Dumb and Dumber” kind of look. I tried to sound really dumb and speak even more slowly than usual. I went in with a rumpled appearance. I just tried to seem like an idiot.” Did Mr. Block ever hear of the old saying “ask a stupid question, get a stupid answer”. Couple of more points. 1) When Block released his unsupported accusations he promised that he would be soon be following up with the details. Does it not seem strange to anyone that it is now a month and a half later and he has produced no additional information? 2) Has anyone noticed that what was a “multibillion-dollar Ponzi scheme,” is now “an overstatement of several hundred million dollars”?

Niels, Satellite photos, I am impressed. Can you tell us where a person can order satellite images as I have trouble getting up to date imagery of areas I am interested in.

I was a lot more sceptical of management a couple of years ago than I am today and they have made some good moves recently. The union agreement has been signed, the debentures have been retired and the cost plus agreement on 50% of RBK production gives those plants some much needed stability. Hopefully they will soon be able to have most of their RBK production contracted on a cost plus basis which should finally remove that drag on the company. I also am waiting to see how they fared with the FDA on the use of RBK in food packaging. So they do seem to be making some good moves, I just hope that they don’t get over ambitious in other areas. And by the way, quite some time ago I came to the conclusion that FBK management does read what we say here so if I am right - keep up the good work and let’s make some money! As for pulp prices, I guess we just have to keep our fingers crossed. But in comparison to the situation a couple of years ago prices certainly have stabilized and look pretty good at this level. FBK probably represents (depending how you look at it) about 8% of my portfolio - today. It fluctuates so widely this can change pretty quickly. I originally bought in at about $1.72 three or four years ago, but have averaged down to around $0.85 so I can’t really complain. Guess we will know more in a month’s time when the Q2 numbers come out, but It would be nice if sometime a report containing some really good news and numbers.

Not surprising that Block won't reveal his address. I'm waiting for the headline that says "Block Missing in China".

Anyone expecting anything interesting in the next report or has everyone bailed and gone elsewhere? I keep telling myself that patience is a virtue, but I have a fair amount tied up here and while I have conceded that I'm in it for the long run, I'm just not sure how long that will be.

Couple of quick points 1) It is refreshing to see some objective analysis here for an change. 2) I think that we will see “gray” areas-, but how much & how gray is my concern. 3) Yes fraud is fraud, at least in the Western world. But in some other areas it is not so cut and dried. Payoffs under the table and off the books may be hard to explain, but are simply the cost of doing business in some place. 4) Being a Canadian company I thought they had to conform to GAAP accounting rules with audited oversight? The saving factor for Sino may well be that it is a major player in a very important commodity for China

libor.plus1 I’m not sure of the point you are trying to make, but you keep confusing the G&M article with a press release. There could be a big difference in bias. I also don’t know where the BS comes in. “Wow... umm. Sino forest postponed the analyst tour for their forests... the excuses they give are bullshit. This is really not a good sign.” “They would need to meet with Poyry, and that they need to get more info from mgmt/PwC. Apparently this isn't possible, and the only party in a position to tell that to the analysts is the company. Bullshit. “ Anyone who has followed this for any time knows that we all have to wait for the PWC report to come in before we know what is going on and that is nothing new. That is simply a fact and not BS. Kraven Agree with what you are saying, but don't you think that because things are not so simple in China and that this company is spread fairly wide, that this is why the audit will take a while. Also & I may be wrong here, but wasn't their regular auditors E&Y and now PWC is doing this special audit?

given2invest As far as long or short is concerned I wasn't even in this thing until a couple of weeks ago when I bought a very small amount, but right about now I wish I had bought a lot more. Boy I wouldn’t like to be in Paulson’s shoes. He looks bad however this turns out. Right now he has lost a bundle. If it goes to zero he looks bad for getting into it in the first place. But if this thing recovers he will look even worse.

"That being said, I didn't see that news article." At least I'll concede points for honesty.

Seriously. Are you guys shorting this stock??

Yeah, and while I was writing this the above similar posts were made, anyway.... “Yah, a company that is under the suspicion of massive fraud should certainly have their press releases taken at face value.” 1) Note your own word “suspicion”. I’d hate to see some of you guys on a jury. 2) If you actually read the article rather than jumping to conclusions you would know: a) The analysts asked for the tour to be postponed, not Sino. b) It was a Globe & Mail Article, not a Sino press release. c) They did their own DD: "Stephen Atkinson, an analyst at BMO Nesbitt Burns who covers Sino-Forest, agreed with that assessment. “Basically, for the trip to be worthwhile, the analysts really need to meet the auditors involved, as well as [Poyry, the company that did a valuation of its forest land]. At the moment, these people wouldn’t be available,” he said. " 3) You guys have obviously jumped to the conclusion TRE is a massive fraud and now are trying to twist the facts to support your preconceived position. 4) Sino may or may not be a fraud, but you certainly don’t have any facts to prove it.

“Wow... umm. Sino forest postponed the analyst tour for their forests... the excuses they give are bullshit. This is really not a good sign.” So Sino cancels the tour as they have something to hide? But if you read the story it plainly says..... “Analysts confirmed that they advised the company to postpone the trip because it wouldn’t be helpful.” So to be balanced, it was Sino’s tour, therefore only Sino could postpone it. However, it was the invited analysts that asked that the tour be delayed. It is a little misleading to suggest that Sino is doing it because they have something to hide. The analysts reasonably felt that it would make more sense to do a tour after the audit. Once that is in we should have a better idea of what is going on.

"I just want someone to get their come uppance...be it TRE or MW." Now THAT I agree with 100%. There is little enough accountability in the markets.

Hester. “1.That's just a completely contradictory two sentences. You say nobody could have done due diligence, and then you say MW's claims are unsubstantiated. How could you possibly know that MW's research is bad if one can't do any due diligence???” “Contradictory?” Perhaps you should check the definition of “unsubstantiated”. Where did I say the research was bad? I said MW’s claims were as yet unsubstantiated and the source of the report had reason to be biassed. If, eventually those claims are substantiated, then we will know where we stand. There is no contradiction in what I said. “If you have any info or facts about the company that makes you think they aren't a fraud, I would love to here it.” What facts do you have that the company is a fraud? As far as this ongoing debate is concerned my position has been relatively simple and straightforward from the start. 1. I don’t see any proof at this point that TRE is, or is not a fraud. 2. Mr. Block has a questionable reputation and has a vested interest in publishing negative views on the company and therefore his report needs to be verified before being accepted as fact. 3. The fact that the stock price dropped from the $25 range to $1.29 makes me wonder if people may be over reacting and even if there is some truth to blocks report there may still be value in the company. 4. IF there is some, or a lot, of value in the company than a good opportunity may have been missed as people have not looked at it objectively and quickly accepted the the negative views that have been circulated. And finally... “The problem is, you never talk about the company.” Partially correct. My point has been to question why some are so quick to accept the negative views on this (or any) company - especially considering the source - and immediately believe they are a fraud when there are yet to be verified facts to support that conclusion. Surely I have explained the above enough times.

RE... "I never said TRE was a fraud!" given2invest - My comments were not specifically directed towards you, but rather the general impression given by several posters here. All I have been saying is that, IMHO, some here have been very quick to judge. I have been saying that I believe that there is a reasonable chance that there is some value in TRE, but I certainly would not guarantee that. Any time you buy any company, there is a certain amount of risk involved. It is a balance of risk vs reward. There may be high risk involved here but also the potential of a good reward. Right about now as the stock is pushing towards $5.00, I'm wishing I had purchased some in the $1.30 - $1.50 range.