Sino-Forest's $41 million of insider profits

Before I went off half-cocked about how impossible it was that the lessons of YBM hadn’t been learned by the Sino-Forest (TRE:TSX) board of directors (see prior post “What’s a ‘Muddy Waters?’” June 2-11), perhaps a look at the SEDI filings of Sino’s senior officers and directors would have been in order first. As a group, insiders have made more than $41 million over the past three years according to data from SEDI.

For those who believe that the relationship between what an insider sells and what they retain bears some insight into the direction of the business, these figures are worth a read:

Director Bill Ardell: 2,000 shares owned. No transactions reported.

Director/Senior Officer Tak Chan: sold 182,000 shares in 2010 received via option exercise for a profit of $2.335 million; still holds 1.488 million.

Senior Officer Hua Chen: sold 30,228 in 2010 for $595,858; still holds 42,680 shares.

Senior Officer George Ho: sold 132,922 shares in 2010 received via option exercise for a profit of $712,088 to hold zero shares.

CFO David Horsley: sold 310,431 shares in 2010 received via option exercise for a profit of $4.219 million to hold 50,000 shares.

Director/Senior Officer of sub. Albert IP: sold 144,100 shares/options in 2008 and 2010 for a profit of ~$2.65 million to hold 5,900 shares.

Director Edmund Mak: sold 170,000 shares/options in 2008 and 2010 for a profit of ~$2.76 million to hold 90,000 shares.

Director/Senior Officer W. Judson Martin: appeared to do some tax planning in 2010 by selling 30,000 indirect shares at an apparent loss and acquiring them indirectly via “Shirley Martin” at $15.81 to hold 30,000 indirectly in total.

Director Simon Murray: sold 182,000 options/shares in 2008, 2010 and 2011 for a profit of ~$2.42 million to hold 93,553 shares.

Senior Officer Kai Kit Poon: In 2005 (sold 385,600 for an unknown price, and only reported on SEDI in 2009), 2008 (sold 2,160,000 shares) and 2010 (sold 73,100 shares) for an apparent profit of $22.4 million. Currently holds 104,405 shares directly.

Senior Officer Wei Mao Zhao: exercised and sold 179,800 of his 210,000 options for a profit of $2.97 million during 2008 and 2010 to hold 30,200 shares.

MRM
(this post, like all blogs, is an Opinion Piece)