Sino-Forest to be delisted from TSX
The Canadian Press
Posted: Apr 6, 2012 8:14 AM ET
Last Updated: Apr 6, 2012 9:10 AM ET
Insolvent Sino-Forest Corp. said Thursday that its shares will be delisted by the Toronto Stock Exchange and its auditors have resigned after the company filed for creditor protection last month.
The company said the TSX has decided to delist its shares, effective May. 9, because it failed to meet continued listing requirements, as well as for failing to produce necessary financial statements.
Also on Thursday, Ernst & Young LLP resigned as auditor for Sino-Forest, which is the subject of several regulatory and other investigations.
The auditors said they resigned over the company's failure to provide financial statements for audit and its inability to "satisfactorily address outstanding issues in relation to its 2011 annual financial statements."
Sino-Forest Corp., once the most valuable forestry company listed on the Toronto Stock Exchange, fell from grace last year after being accused of massive fraud by U.S. short seller Muddy Waters Research.
The company currently faces investigations by securities regulators and the police. Trading in its shares has been halted on the TSX for months.
The company hasfiled for bankruptcy protection and put itself up for sale, saying that if it doesn't receive a suitable takeover offer it will implement a restructuring plan under the Companies' Creditors Arrangement Act that would see lenders take control.
Last month, it announced it would not be able to file its audited annual financial statements for 2011 by a March 31 deadline, however Sino-Forest said it would make a draft version of its third-quarter results available.
The company cautioned that the third-quarter results have not been reviewed or approved by the board, any committee of the board or its auditors.
Sino-Forest filed a report by its own independent committee earlier this year into the allegations by Muddy Waters, but fell short of bringing investors any closer to seeing a return on their investment in the company.
Sino-Forest, which owns and manages tree plantations as well as other manufacturing operations in China, last traded on the TSX in August 2011 at $4.81 per share.
Richard Chandler, a New Zealand billionaire investor, was the largest holder of Sino-Forest shares with just under 20 per cent, while New York-based Davis Advisors held about 17 per cent of the company.
Shareholders typically receive little or nothing under a CCAA restructuring.
Meanwhile, Sino-Forest has denied the fraud allegations and said its is pursuing a lawsuit against Muddy Waters Research and its research director, Carson Block, as well as others who have accused the company of fraud.
Sino-Forest accused Muddy Waters and Block of making defamatory statements and is seeking $4 billion and the recovery of profits made by the short seller and others.
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