TORONTO (Reuters) - Major accounting firm Ernst & Young LLP has reached a tentative settlement with Canada’s biggest securities regulator over its audits of Sino-Forest Corp [SCLC.UL] and another China-focused company, the Ontario Securities Commission said on Friday.
The OSC will hold a hearing on Sept. 30 to decide whether to approve the settlement related to audits of the insolvent forestry company and clothing and footwear company Zungui Haixi Corp, it said in a brief statement.
The terms of the settlement were not disclosed. Ernst & Young could not immediately be reached for comment.
The OSC plans to call Ernst & Young auditors as witnesses in a separate hearing against former Sino-Forest executives who the regulator alleges willfully defrauded investors. The executives have denied the charges.
Sino-Forest had been listed on the Toronto Stock Exchange and was at one point valued at more than C$6 billion ($5.47 billion). But its shares tanked and were later de-listed after a short-seller in 2011 alleged the company had exaggerated its assets.
In July, the OSC settled with David Horsley, Sino-Forest’s former chief financial officer. He was fined and banned from being a public company officer or corporate director.
Zungui Haixi Corp was probed and in 2011 after Ernst & Young flagged accounting concerns within the company.
Reporting by Alastair Sharp; Editing by Jeffrey Hodgson and Leslie Adler