Suriname timber company files lawsuit against stock exchange watchdogs

(de Ware Tijd) PARAMARIBO – Sino Forest, largest shareholder of Suriname’s biggest timber concessionary Greenheart Group Limited (GGL) has filed a US$ 4 billion claim with the court against independent stock exchange watchdogs including Muddy Waters and Carson Block, as it has suffered enormous losses on the Toronto Stock Exchange in recent months due to doubts about its holdings, namely in Suriname, expressed by these watchdogs, David Wu GGL’s Vice President of Corporate Development and Investment Affairs confirms to de Ware Tijd.

In mid-2011, Muddy Waters issued a report expressing its doubts about Sino Forest’s real holdings in Suriname and New Zealand, as the holdings in Suriname in particular could not be verified. The report caused a major drop in the value of Sino Forest’s shares on the Toronto Stock Exchange, causing the timber company millions, while GGL shares on the Hong Kong Stock Exchange were also adversely affected. Wu points out those officials of the Forestry Management Foundation (SBB) and Minister Simon Martosatiman of Forest Management (RGB) have repeatedly stated there was no reason to doubt GGL’s holdings in Suriname, while SBB has claimed it has never been consulted by Muddy Waters for the report.

In the past two years, GGL has invested millions of dollars to take over four large concessions in Suriname, and currently it manages some 403,000 hectares in timber concessions. By late 2011, GGL managed to present itself as separate from Sino Forest and distance itself from that company’s problems. Although it has been allowed to trade on the Hong Kong Stock Exchange again, Sino Forest still has trouble clearing its name and has started a transition from publicly traded company to a privately owned one. Besides its shares in GGL in Suriname, Sino Forest has also put up all its other properties in South China and New Zealand for sale on the international market, and if no buyer is found within 90 days, the shareholders will be given an opportunity to take over the company and manage the transition. “We believe both options can provide stability and support for Greenheart’s long-term plans for Suriname”, Wu says from Hong Kong. GGL Suriname operations manager Tony Wood is hopeful about the process set in motion by Sino Forest, adding that the project in Suriname is not in jeopardy.

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