Mandolin Fund ups stake in Sino-Forest to 18%

The fund, run by New Zealand-born billionaire Richard Chandler, said on Friday that it bought another 2.7 million shares at an average price of C$6.09 on August 4. It now holds a total of 44.3 million common shares in the company.

Mandolin's previous purchases came in the last two weeks of July and helped Toronto-listed Sino-Forest shares rise from a mid-June low of C$1.29. They closed on Friday at $5.97, still down more than 70% this year.

Sino-Forest's troubles began at the start of June when The share price is still down 60% from the beginning of June when short-seller research firm Muddy Waters accused the company of overstating its assets and defrauding investors by routing funds off the books through a web of intermediaries. Sino-Forest denies any wrongdoing and has asked a committee of independent directors to investigate the matter.

The negative sentiment was enough to persuade hedge fund Paulson & Co. to exit its stake in the company, citing uncertainty over public disclosures and financial statements. Paulson was said to have owned nearly 35 million shares, which implies a paper loss of more than $500 million.

Sino-Forest's counterpart China Forestry, which is among The Carlyle Group's portfolio companies, was suspended from trading in February over potential auditing irregularities.

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• Topics
• Industrials
• PIPEs
• Greater China
• Paulson & Co
• The Carlyle Group