Chan, who stepped aside as chairman and chief executive officer in August, has “voluntarily” quit his non-executive position as Chairman Emeritus, Hong Kong- and Mississauga, Ontario-based Sino-Forest said yesterday in a statement. Chief Financial Officer David Horsley also resigned, Sino-Forest said, and will remain an employee to help the company restructure.
Sino-Forest filed for bankruptcy protection in March, nine months after the company was accused of fraud by short seller Carson Block. A June 2 report by Block’s Muddy Waters LLC alleged that Sino-Forest was a Ponzi scheme and had overstated its timber assets.
The Muddy Waters report led to a 74 percent drop in Sino- Forest’s Canadian share price before the Ontario Securities Commission suspended trading in August amid investigations by the Toronto-based market watchdog and federal police. Sino- Forest, which had a market value of C$6.36 billion ($6.42 billion) in March 2011, has denied Block’s allegations.
The company also fired three vice presidents, Alfred Hung, George Ho and Simon Yeung, and said Albert Ip, a former executive, will no longer be employed as a consultant.
The securities regulator has served Chan, Hung, Ho, Yeung, Ip and Horsley with enforcement notices, the company said in an April 9 statement. The notices are usually issued by the OSC close to the end of an investigation and say that staff are considering formal proceedings, Sino-Forest said.
Sino-Forest Chairman William Ardell said in February the company hasn’t been able show it controls a purported 788,700 hectares (3,045 square miles) of timber. Ardell led a $50 million, eight-month probe by Sino-Forest directors that concluded the company may never be able to disprove some of Block’s allegations.
Sino-Forest’s application for protection from creditors was part of an accord with bondholders to either sell the company to a third party or undergo a restructuring that would give them most of the remaining assets.
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