So far the only thing we’ve learned in the Sino-Forest investigation is that a special committee of the company’s own directors have found no fraud at the company.
Now it looks like we may not get the full picture for a while. The Wall Street Journal reports that Sino-Forest has scrapped plans to have an independent party investigate its assets— the actual supply of trees in its possession and their value.
Part of the reason, according to the company, is that its report should be finished by the end of the year, and that’s not enough time to calculate the value of Sino-Forests’ assets (which would take until the beginning of 20120 or so).
The other reason is because questions arose about the true independence of the company that Sino-Forest had selected to conduct the investigation.
So they decided to just not do it at all.
The problem with here is that the idea that Sino-Forests assets are over-valued was one of the main reasons that Muddy Waters wrote such a damning report on the company. Firstly, the report said that Sino-Forest manipulated the results of a third party valuation of their assets. Secondly, it said that Sino-Forest paid too much for the trees in the first place, so their value was inflated in the company’s own books.
The internal committee of directors has said the company’s August report may contain an independent calculation of the company’s assets.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.