Cathay Forest Products appoints Honda Cheng as sixth member of board of directors; provides update on progress of investigations, class action lawsuit
September 12, 2011
– Cathay Forest Products Corp. ("Cathay Forest") (TSX-V: CFZ.V - News) today announces that Mr. Honda Cheng was appointed as director of Cathay Forest. With the addition of Mr. Cheng, the board of directors of Cathay Forest is now comprised of six directors including Robert Beutel, Thomas Chan, John Duncanson, John Housser and Stephen Miller.
A Hong Kong resident, Mr. Cheng is Executive Director of Top Cheers Ltd, Export Finance Solutions. Top Cheers Ltd. provides asset base lending and project financing in Mainland China. Prior to forming Top Cheers Ltd. in 2008, Mr. Cheng was Chief Executive Officer of East Asia Heller a joint venture between GE Capital and the Bank of East Asia.
In addition to the above announcement, the Company wishes to provide the following update.
On February 4th, 2011, the TSX Ventures compliance group began an investigation under the Continuous Disclosure Regulations. Since that time, the Company has been cooperating fully with the TSX in regards to this investigation.
On April 27th, 2011 the Company announced that the release of the financial statements for the year ended December 31, 2010 was being delayed as the Company completes investigations with regards to a number of transactions that were identified by management during the course of the year-end audit work. The internal investigation into these transactions is proceeding and the Company is working closely with its auditors and legal counsel to arrive at a definite conclusion with regards to the transactions being investigated. The investigations have yet to be completed and the Company cannot comment further as to the outcome of these matters.
On June 30th, 2011, the Ontario Securities Commission ("OSC") announced the beginning of investigations of several listed companies with China connections, including Cathay Forest. The investigations are being carried out under the Continuous Disclosure regulations. The Company is cooperating fully with the OSC staff in the investigation process. Responses to OSC requests are prepared and submitted on a timely basis. The investigation involving the Company is still at an early stage but the Company fully intends to continue its cooperation with the OSC on this matter.
A class action lawsuit has been commenced against the Company, certain of its current directors and officers as well as certain former directors. This matter is in its preliminary stages but the Company fully intends to defend its action in this matter.
The Company's stock continues to be under cease trade order. It is unknown at this time when trading might be permitted to resume. The Company is committed to diligently work closely with the OSC, the TSX and its professional advisors in order to restore trading.
About Cathay Forest Products
Cathay Forest is a forest products company that manages approximately 1,000,000 hectares of standing timber properties and fast-growth, high-yield poplar plantations in China and Russia. Cathay Forest is building a world-class forest products company through a customer base that includes the domestic Chinese pulp and paper industry and other wood products customers in the Japanese market.