TORONTO, April 9 (Reuters) - The Ontario Securities Commission has alleged that Sino-Forest’s conduct runs contrary to sections of the Ontario Securities Act dealing with false and misleading statements and fraud, the Chinese forestry company said on Monday.
The OSC, Canada’s largest securities regulator, has served Sino-Forest and its officers with enforcement notices that identify issues uncovered during the regulator’s probe of the company.
Sino-Forest, which has been caught in a maelstrom of fraud allegations, did not provide details of the OSC allegations but said such notices are issued by the OSC at or near the end of an investigation and set the stage for the regulator to commence formal proceedings against the company and some of its current and former officers.
The company said it is considering what steps to take in light of the OSC enforcement notices.
Sino-Forest’s stock tanked last June after short seller Carson Block and his firm Muddy Waters accused the company of fraudulently exaggerating the size of its forestry assets. The company was granted protection from creditors last month after it argued that the allegations against it had paralyzed its business.
Trading in the company’s stock was halted by the OSC last August and has not yet resumed. The company is set to be delisted by the Toronto Stock Exchange in May.