June 21, 2011 / 10:00 PM / 7 years ago

Sino-Forest, auditors facing class-action lawsuits

* One suit accuses Sino of false and misleading statements

* Current auditor Ernst & Young named in two lawsuits

* Former auditor BDO and underwriters named in another

By Alison Frankel

NEW YORK, June 21 (Reuters) - Canadian-listed Chinese forest company Sino-ForestTRE.TO and its auditors are facing class action lawsuits following the meltdown of its shares amid allegations of accounting fraud.

On Monday, two Canadian plaintiffs’ firms, Siskinds LLP and Koskie Minsky LLP, filed a $6.5 billion lawsuit against Sino-Forest, its directors and officers, auditor Ernst & Young LLP and consulting firm Poyry Beijing.

The lawsuit, which seeks class certification on behalf of Sino-Forest investors, said the company issued misleading financial statements, including prospectuses for stock offerings that raised almost $950 million from investors.

“Sino purported to be a legitimate enterprise operating as a commercial forest plantation operator,” the June 20 notice of action says. As part of its reporting obligations, it made statements about the nature of its business, revenues and profits that were “materially false and/or misleading,” the notice said.

Sino and Ernst & Young LLP were previously named in a June 8 suit filed by plaintiffs’ firm Rochon Genova of Toronto. That case, which also seeks certification of a global investor class, also named as defendants former Sino auditor BDO Ltd and nine underwriters on Sino securities offerings.

The case filed on Monday is Trustees of Labourers’ Pension Fund of Central and Eastern Canada vs Sino-Forest, Ernst & Young LLP et al, Ontario Superior Court of Justice, No. cv-11-429003-00CP.

Reporting by Alison Frankel; writing by Dena Aubin, editing by Martin Howell

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below