The Sino Forest Independent Committee Report - Part 3.
Sino Forest had a simple enough business model. It held forest and then sold the standing trees to Authorized Intermediaries. AIs (and parties related to them) often sold them the cutting rights.
Sino Forest did not own trucks, chainsaws or employ huge numbers of people because the AIs did all that. All the things needed to run a 17 million tonne per year forestry operation were done by the AIs.
So the AIs you would expect are fairly substantial organizations - bigger than Sino Forest anyway - because the AIs do all the work.
This makes the Sino Forest meeting with the AIs the critical part of the Sino Forest investigation. This was the backbone of Sino Forest. If the AIs were phony then Sino Forest is unambiguously fraudulent.
You can find the full summary of the meetings with AIs here. I am just going to quote the first page. This is not a selective quote (check the original if you want).
Terms Not Herein Defined Shall Have The Meaning As Ascribed In The Second Interim Report Of The Independent Committee Of The Board Of Directors Of Sino-Forest Corporation.
Supplier #1 (OSC Supplier #1)
Location 1
Hunan City #3
(Source: Provided by SinoForest)
Site did not have signs or any other indication that Supplier #1 occupied
the location.
According to an individual from the neighbouring office, Supplier #1’s
office is located on 2/F of the building. They were unsure whether or not
people worked in the office there.
Encountered individuals who introduced themselves as Supplier #1 staff,
including one who introduced herself as the Financial Controller.
Neighbouring occupants stated the office was no longer used and Supplier
#1’s office had moved to a new site located on 6/F of the (redacted)
building in Hunan Location 5.
Went to new address and confirmed that Supplier #1 shared the 6/F with
Hunan City #3's Government Land Acquisition and Demolition
Remediation Department.
Location 2
Hunan City #3
(Source: SAIC filings)
This was a factory site previously occupied by Supplier #1.
The factory is now operated by Other Co #11, a company owned by Other
Co #12.
According to a factory worker and neighbouring occupants, Supplier #1
moved out in 2009.
Neighbouring occupants referred to Supplier #1 as "Sino-Forest's Supplier
#1" (嘉漢的供應商#1).
Location 3
Hunan City #3
(Source: Mailing address
provided by Sino-Forest)
Individuals identifying themselves as Supplier #1 personnel stated that
Location 3 should, in fact, be the same as Location 1 as there was only one
insurance office building on the road. The address should be (redacted)
instead of (redacted).
Location 4
Hunan City #3
(Source: Mailing address
provided by Sino-Forest)
This location is the same as Supplier #10 Location 1 and is now a bank
with the office above occupied by the bank itself.
The security guard for the bank had not heard of Supplier #1.
It goes on:
Supplier #10 (OSC Supplier #10)
Location 1
Hunan City #3
(Source: Provided by SinoForest)
This location is the same as Supplier #1 Location 4 and is now a bank with
the office above occupied by the bank itself.
The security guard for the bank had not heard of Supplier #10.
Location 2
Hunan City #3
We could not locate Supplier #10 from the address provided.
Neighbouring occupants had not heard of Supplier #10.
Monty Python could have written this.
Remarkable company Sino Forest: beautiful plumage.
John