Friday, June 3, 2011

Plunge Results in Trading Halt for China Forestry Group

Trading in Sino Forest was halted in Toronto yesterday after shares in the Chinese forestry group plunged more than 20 per cent following a highly critical research report by Muddy Waters, a research firm founded by short seller Carson Block.

Sino Forest is one of dozens of Chinese companies listed on foreign stock exchanges – three of them in the forestry sector – that have been targeted by short sellers in recent months and have had their shares suspended from trading, reports FT.

China Forestry, another mainland plantation operator, had its Hong Kong-listed shares suspended in January and its chief executive has been arrested for the alleged embezzlement of $4.6m.

Small-cap Cathay Forest Products, which is also listed in Toronto, has been suspended from trading since January after breaching stock exchange rules related to investment disclosure

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