This tiny hamlet, a huddle of a few dozen mud-brick and wood homes high in the mountains that are the craggy climb to the Tibetan Plateau, is the kind of place where nothing ever happens. The pace of life is such that cattle can stand for a long while in the middle of the town’s lone dirt road without disrupting traffic, which even at the busiest times of day is only the occasional lumbering truck.
So when a quartet of officials from the county forestry bureau arrived one day three years ago, driving all over the mountains with odd-looking machines in their hands, it caused quite a commotion. Even still, none of the nosy residents could have anticipated that the arrival of the four men with the hand-held GPS devices was a moment that would bring that rarest of commodities to Anjia: change.
The arrival of the forestry officials dumped the unprepared residents of Anjia, a corner of China’s Yunnan province that seems to exist in the 19th century, and dozens of others like it, into the world of 21st century finance. An effort to reform China’s forestry industry – which was supposed to help close the wide wealth chasm between the country’s rural and urban halves – resulted instead in a parade of swindlers and middlemen to places like Anjia, persuading the locals to sign away the usage rights to their land for a pittance, then selling it to bigger foreign and domestic companies that were looking to cash in on one of the biggest property transfers in history.
In the case of Anjia and three other towns around it, the end buyer was
Sino-Forest Corp. (4.81----%), a Toronto-listed company run by a Hong Kong entrepreneur, Allen Chan, who devised a way to profit from that land shift and from Canadian investors’ hunger for a Chinese growth story. By accumulating tracts of forestland all over China – then raising billions of dollars from investors to do it over and over again – Sino-Forest grew to be the largest forestry firm on the Toronto Stock Exchange, at one point valued at some $6-billion, until it came crashing down this summer under allegations of massive fraud. In late August, Mr. Chan quit as chief executive officer and four other executives were put on leave or stripped of their duties while the company and the Ontario Securities Commission investigate.