A Chinese forestry company with backing from Western private-equity funds reported a 2010 loss of US$417 million after drastically lowering the value of its chief assets, the latest in a string of accounting and transparency problems at Chinese firms, the Wall Street Journal reported. China Forestry Holdings Co (0930.HK, CHFY.OTC), which had received early investments from the US-based Carlyle Group and Switzerland-based Partners Group, also said that its former CEO was arrested by Chinese authorities on February 24 on charges of embezzling US$4.6 million from the company, and that it is unable to reach its CFO and other senior staff who recently left the company. In its 2010 earnings, the company drastically lowered the value of its plantation holdings, its chief asset, but also said it could not ensure that its financial statement were accurate because “most of the former key accounting personnel have left without notice.” Carlyle paid US$55 million in 2008 to acquire a stake now amounting to nearly 11% in China Forestry, while Partners Group invested US$30 million in 2009 and now holds a 5.5% stake. The company raised US$216 million by listing on the Hong Kong stock exchange at the end of 2009. Trading in the company’s shares was suspended in January after auditors KPMG informed the company’s board of irregularities in its books.