Singapore fund adds to SinoForest stake

TORONTO: A large Singapore-based fund has acquired more shares of Sino-Forest, taking its ownership stake in the Chinese forestry company accused of fraud to nearly 15 percent.

The Mandolin Fund, run by New Zealand-born billionaire Richard Chandler, disclosed on Wednesday it acquired more than 5.3 million shares of Sino-Forest on July 26.

The fund's move explains a sharp rise in Sino-Forest's share price on Tuesday, when the stock climbed more than 20 percent before ending the day up almost 12 percent at C$7.12.

Shares of the Toronto-listed Sino-Forest have fallen more than 60 percent since the beginning of June, following accusations of fraud leveled by influential short-seller Carson Block and his firm Muddy Waters.

Sino-Forest has denied any wrongdoing and it has asked a committee of independent directors to investigate the matter.

The stock, which had fallen as low as C$1.29 in mid-June, has won a reprieve as speculators and large funds such as Mandolin Fund and Boston-based Wellington Management Co decided to raise their stakes in the company.

Just a week ago, the Mandolin fund disclosed that it had boosted its stake in Sino-Forest to more than 10 percent. Since then Sino-Forest's shares have risen over 66 percent.

Copyright Reuters, 2011