The Financial Post reports in its Thursday edition that a dark cloud hangs over Chinese companies listed on the Toronto Stock Exchange thanks to the escalating Sino-Forest scandal. The Post's Eric Lam, writing in Trading Desk, says Ben Isaacson, analyst with Scotia Capital, has bumped up his risk ratings on fertilizer producers Hanfeng Evergreen and Migao to "Caution Warranted" from "High Risk" as both are listed in Toronto via reverse takeovers, just like Sino-Forest. "While our revised risk rating is not an attempt to group the two small-cap Chinese fertilizer companies with those Chinese RTOs that have recently been accused of fraud, we are erring on the side of caution," he said in a note to clients. Mr. Isaacson has visited several Chinese plants owned by both companies. "We are not aware of any non-arms-length transactions," he said. However, Mr. Isaacson points out that a Migao director, Michael Manley, also sits on the board of Zungui Haixi, which recently had its trading halted after Ernst & Young suspended its audit. As well, Hangfeng has installed a new chairman and chief financial officer in the past year. Mr. Isaacson maintains a fundamental valuation preference for Migao over Hangfeng.