Sino-Forest announces personnel changes in wake of enforcement notices

By Caroline Salls

Pittsburgh, April 17 - Sino-Forest Corp. announced some personnel changes on April 17 and said it plans to ask the court to enhance the powers of monitor FTI Consulting Canada Inc., according to a company news release.

Specifically, Sino-Forest said it has terminated the employment of corporate planning and banking vice president Alfred Hung, finance vice president George Ho and Sino-Panel (Asia) Inc. operations vice president Simon Yeung.

The company said former senior North East and South West China development and operations vice president Albert Ip will not serve as a consultant to Sino-Forest.

In addition, Sino-Forest said founding chairman emeritus Allen Chan has voluntarily resigned, and David Horsley has resigned as the company's chief financial officer but will continue as an employee to assist with restructuring efforts.

As previously reported, Hung, Ho and Yeung were placed on administrative leave in August 2011, and Ip was requested to act solely on the instructions of vice chairman and chief executive officer W. Judson Martin after information was uncovered during the course of a review being undertaken by the independent committee of Sino-Forest's board.

The independent committee was established in response to allegations made in a Muddy Waters LLC report that was publicly disclosed on June 2, 2011 and immediately before the Ontario Securities Commission issued a temporary cease trade order on Aug. 26, 2011.

According to the release, following the release of an enforcement notice from the staff of the Ontario Securities Commission on April 9 and further discussions with the staff, Sino-Forest's board decided that it was in the best interests of the company to terminate the employment of Hung, Ho and Yeung and not enter into a consulting agreement with Ip.

Also following receipt of the enforcement notice, Chan told the board that he wanted to resign as founding chairman emeritus and as a Sino-Forest employee. The company said Chan is still available to assist with efforts to allow stakeholders to realize value in connection with assets located in the People's Republic of China.

Sino-Forest said in the release that the board believes that the nature of allegations made against Horsley in the enforcement notice differ substantially from those made against the other individuals who received enforcement notices on April 5.

As a result, the board decided that it is in the best interests of the company to retain Horsley's services while allowing him to step down from his role as CFO.

Toronto-based Sino-Forest is a commercial forest plantation operator in China.

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