Sino-Forest Corp's China JV Reported Sales, But Produced Nothing: report
Sino-Forest Corp. (TRE.TO) reported sales in the millions between 1994 and 1997 from a wood-panel joint venture in China that never produced a single piece of the building material, the Globe and Mail newspaper reported over the weekend, citing a former executive.
Zhanjiang Leizhou Eucalyptus Resources Development Co. didn't generate any revenue from the fiber board product before the joint venture was disbanded in 1998, the newspaper reported, citing Qi Shuxiong, a former Sino-Forest director.
The Ontario Securities Commission on Aug. 26 suspended Toronto trading of Sino-Forest's shares and alleged that some executives and directors appeared to have engaged in activities that they knew, or should have known, "perpetuate a fraud."
Allen Chan, who co-founded Sino-Forest in 1992, announced his resignation as chairman and chief executive officer on Aug. 28 and became the company's chairman emeritus. He didn't respond to the Ontario regulator's charges at the time. The Globe and Mail said Chan didn't respond to its interview requests.
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