Tax Alert Warning:

The curious transactions totalling $6-million and inked on March 7 between a Sino-Forest subsidiary with an empty office and a seller with no address highlight the bigger questions surrounding Sino-Forest’s dealings in southern China. Trying to penetrate Sino-Forest’s complicated business in Yunnan can be like trying to spot the sun through the thick forests of oak, birch, pine and other timber that carpets the mountains in this sprawling region along China’s border with Myanmar.

Sino-Forest, once Canada’s biggest publicly-traded timber company, has seen its stock fall by 82 per cent since the June 2 publication of a report by a short seller, Carson Block of Muddy Waters LLC, that alleged large-scale fraud and overstatement of assets by the company.

13AUG2001