Regulator alleges fraud at Sino-Forest

“This is an important first step and our investigation is continuing into this matter, including an examination of the role of the gatekeepers,” OSC After a lengthy investigation, the Ontario Securities Commission has outlined its case against failed forestry firm Sino-Forest Corp. (TSX: T.TRE, Stock Forum)

Stock Forum) and its senior executives. According to a statement released Tuesday, OSC staff allege that Sino-Forest and members of its overseas management engaged in numerous deceitful and dishonest courses of conduct connected with the purported purchase and sale of timber in the People's Republic of China. It also alleged that Sino-Forest provided grossly misleading disclosure to investors and that certain former executives attempted to mislead the OSC's investigation. The OSC further alleges that the company, its former senior executives, including Allen Chan, Albert Ip, Alfred C.T. Hung, George Ho and Simon Yeung, engaged in a complex fraudulent scheme to inflate the assets and revenue of Sino-Forest and made materially misleading statements in Sino-Forest's public disclosure record related to its primary business. The allegations are being announced almost one year after a controversial short sellers report alleged that Sino-Forest – until then one of Canada's largest publicly traded forest companies -- had been fraudulently exaggerating its assets and earnings, and that the shares were essentially worthless. Continue reading this article

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