Carlyle-, Partners-backed China Forestry under investigation
The CEO of the Carlyle- and Partners Group-backed company China Forestry Li Han Chun has had $51 million worth of assets frozen after the Hong Kong Securities and Futures Commission uncovered potential auditing irregularities leading to the suspension of China Forestry share trades.
Carlyle currently holds approximately 11% of the Beijing-based forestry plantation operator, which it first invested in three years ago through its Carlyle Asia Growth Partners III, according to the PE firm's website. Its initial $40 million investment bought Carlyle 12.5% of the company, and it has since injected more, The Wall Street Journal reported, while Partners Group currently holds approximately 5.5%.
The issue allegedly arose after the company's auditor, KPMG, found potential discrepancies in the company's 2010 audit, which led to an 18% drop in the company's shares prices in the following weeks. The decision to suspend trading was self-imposed by China Forestry, which went public in 2009, the Securities and Futures Commission noted in a release.
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