The Ontario Securities Commission is formally accusing troubled Chinese timberland company Sino-Forest Corp. of lying to investors and attempting to mislead investigators.

The regulator filed the fraud allegations on Tuesday against the company as well as its founder and former chief executive Allen Chan, Albert Ip, Alfred Hung, George Ho and Simon Yeung.

"This is a complex international investigation and we have dedicated significant resources to this file, moving swiftly to take action against these individuals," said Tom Atkinson, the OSC's director of enforcement.

"This is an important first step and our investigation is continuing into this matter, including an examination of the role of the gatekeepers."

Sino-Forest is accused of overstating its assets and revenue as well as misleading investors as to the relationship between Sino-Forest, Chan and Greenheart, a publicly traded company listed in Hong Kong.

The regulator alleged Chan secretly controlled companies that received over $22 million when Sino-Forest bought a controlling interest in Greenheart.

OSC staff also alleged that former Sino-Forest chief financial officer David Horsley did not comply with Ontario securities law and acted contrary to the public interest.

Case referred to RCMP

However, Horsley did not face the more serious allegations of fraud.

The OSC and a special committee of the company's board both launched investigations last year after fraud allegations were first levelled in June by short-seller Muddy Waters Research.

In addition to its own investigation, the OSC referred the case to the RCMP last year.

The company has filed 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.

The CCAA process can take six months to a year but because there is so much uncertainty over its assets, the Sino-Foreset process could take even longer.

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.

Its shares have been delisted from the Toronto Stock Exchange.