Sino-Forest Corp. (TRE), the Chinese timber company that filed for bankruptcy last month after being accused of fraud, received an enforcement notice from Canada’s main securities regulator.
The April 5 notice from the Ontario Securities Commission “contains allegations of a serious nature” consistent with a cease-trade order issued on Aug. 26, Sino-Forest said in a statement yesterday. Chief Financial Officer David Horsley and former Chief Executive Officer Allen Chan also received notices, the Hong Kong- and Mississauga, Ontario-based company said.
Enforcement notices are usually issued by the commission close to the end of an investigation and say that staff are considering formal proceedings, Sino-Forest said. The commission halted trading of Sino-Forest in August and began a probe after the company was accused in June by short seller Carson Block of exaggerating its revenue. Sino-Forest has denied the allegations.
The commission said at that time that the company and some of its officials may have provided public information that was false or misleading.
The company also said yesterday that enforcement notices were received by Alfred C.T. Hung, George Ho and Simon Yeung, all of whom Sino-Forest said in August it was placing on administrative leave. Albert Ip, who resigned in March, got an enforcement notice as well.
Separately, the commission said yesterday it will hold a hearing April 13 to consider whether to extend the cease-trade order it made on Aug. 26.
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