Sino-Forest's CEO resigns
Source: Bloomberg News |
August 29, 2011, Monday
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Print Edition
Print Edition
TORONTO-LISTED Chinese tree-plantation operator Sino-Forest Corp's chairman and chief executive officer, Allen Chan, resigned after a short-seller accused the timber company of fraud and the Ontario Securities Commission halted trading in its shares.
William Ardell, the lead director of Sino-Forest's independent committee, which is reviewing the allegations, was named chairman, while Judson Martin, an executive director, is the new CEO, the company said yesterday in a statement. Sino-Forest also placed three employees on leave after "certain information" was uncovered by the committee, it said.
The OSC, Canada's main securities regulator, said last Friday that Sino-Forest may have misrepresented revenue and inflated its timber holdings. The company's shares have fallen 67 percent in Toronto trading since short-seller Carson Block's Muddy Waters LLC published a report on June 2 alleging that the company was a "fraud."
"The allegations made in the OSC's temporary order, while unproven, are of a serious nature," Sino-Forest, based in Hong Kong and Mississauga, Ontario, said in the statement. "The company's business is complex, the scope of the review is significant and there are enormous amounts of data that have been marshaled and are under review."
Sino-Forest has denied Muddy Waters' allegations.
The OSC watchdog last Friday ordered Chan and four other Sino-Forest group executives to resign and later rescinded the order.
The suspension of trading in Sino-Forest's shares didn't cause a default under the company's guaranteed senior notes or its convertible senior notes, the statement said.
William Ardell, the lead director of Sino-Forest's independent committee, which is reviewing the allegations, was named chairman, while Judson Martin, an executive director, is the new CEO, the company said yesterday in a statement. Sino-Forest also placed three employees on leave after "certain information" was uncovered by the committee, it said.
The OSC, Canada's main securities regulator, said last Friday that Sino-Forest may have misrepresented revenue and inflated its timber holdings. The company's shares have fallen 67 percent in Toronto trading since short-seller Carson Block's Muddy Waters LLC published a report on June 2 alleging that the company was a "fraud."
"The allegations made in the OSC's temporary order, while unproven, are of a serious nature," Sino-Forest, based in Hong Kong and Mississauga, Ontario, said in the statement. "The company's business is complex, the scope of the review is significant and there are enormous amounts of data that have been marshaled and are under review."
Sino-Forest has denied Muddy Waters' allegations.
The OSC watchdog last Friday ordered Chan and four other Sino-Forest group executives to resign and later rescinded the order.
The suspension of trading in Sino-Forest's shares didn't cause a default under the company's guaranteed senior notes or its convertible senior notes, the statement said.
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