The Ontario Securities Commission is accusing Sino-Forest Corp. (TSX:TRE), company founder and former chief executive Allen Chan, Albert Ip, Alfred Hung, George Ho and Simon Yeung of fraud.
OSC staff alleged Tuesday that Sino-Forest and members of its overseas management engaged in numerous “deceitful and dishonest” actions connected with the purported purchase and sale of timber in the People’s Republic of China.
The OSC alleges that Sino-Forest provided “grossly misleading” disclosure to investors and that certain former executives attempted to mislead the regulator’s investigation.
“This is a complex international investigation and we have dedicated significant resources to this file, moving swiftly to take action against these individuals,” said Tom Atkinson, director of enforcement in release. “This is an important first step and our investigation is continuing into this matter, including an examination of the role of the gatekeepers.”
In the statement of allegations, OSC staff also allege that Allen Chan committed fraud in relation to his undisclosed interest and substantial benefit in Sino-Forest’s purchase of a controlling interest in Greenheart Group, a public company listed on the Hong Kong Stock Exchange. Additionally, OSC staff allege that former Sino-Forest chief financial officer David Horsley did not comply with Ontario securities law and acted contrary to the public interest.
None of the allegations has been proven.
The OSC received assistance in its investigation form the enforcement division of the Securities and Futures Commission in Hong Kong.