The deeper one looks into Sino-Forest Corp, the Toronto-listed Chinese logging firm that has been engulfed by allegations of fraud, the more questions emerge.
Sino-Forest, which was once the most valuable forestry company on the Toronto stock exchange, has lost most of its stock market value after being accused in a June 2 research note by American private investor Carson Block of overstating its forestry assets in China and being a 'stratospheric fraud'.
On August 26, the Ontario Securities Commission charged that Sino-Forest directors, including its Hong Kong-based founder Allen Chan Tak-yuen, had committed fraud and misled the stock market. The commission called on Chan and four other executives to resign.
Yet one part of Sino-Forest that has escaped notice so far is Greenheart Group, its Hong Kong-traded subsidiary, which counts Li Ka-shing's former right-hand man, Simon Murray, as a director and founding shareholder.
Trading was suspended in Greenheart shares on August 29.
While Sino-Forest billed itself as the mainland's biggest logging company, Greenheart says it is one of the largest forest owners in the tiny South American nation of Suriname, a heavily forested, former Dutch colony situated north of Brazil and between Guyana and French Guiana.
That may be true. But official public records in Suriname also conflict with some statements Greenheart and Sino-Forest have made about Greenheart's assets. Public records show Greenheart may own far less forest land than it had previously claimed.