Sino-Forest Corp. was asked just days ago to provide proof of ownership for its Chinese timberlands but declined, according to BMO Nesbitt Burns analyst Stephen Atkinson.
Mr. Atkinson cut his rating on Sino-Forest Friday morning to "market perform" after the company was the subject of a report Thursday by another research firm that questioned whether Sino-Forest really owns the trees it says it does. Sino-Forest shares plunged in response.
Mr. Atkinson said that analysts have asked Sino-Forest to prove it has the forests, but were rebuffed.
"At the analysts' presentation after the annual general meeting on May 31, 2011, proof of ownership (Forest Certificates) was requested but the Chairman and CEO, Allan Chan, did not want to release this information for competitive reasons," Mr. Atkinson said in his note.
The BMO analyst didn't give a new target price "pending a better understanding of the company's timber holding" and said that "given the information vacuum regarding the issues raised and the halt in stock trading on the TSX, we have lowered our rating to Market Perform (Speculative)."