$117M class action settlement between Ernst & Young, Sino Forest
Chinese-Canadian company accused of fraudulently overstating assets.
Ernst & Young
TORONTO — The Ontario Superior Court has approved a $117-million class-action settlement involving Sino-Forest Corp. and its former auditor, Ernst & Young.
The agreed deal will see the accounting firm pay towards into a fund to compensate shareholders of the troubled Chinese-Canadian company, which has been accused of fraudulently overstating its assets.
It’s believed to be one of the largest settlements involving an auditor in Canadian history.
The class-action had alleged that directors, officers, auditors and underwriters at the timber trader misled investors with its accounting.
Several shareholders had originally objected to the settlement.
The company was first accused in 2011 of being a Ponzi scheme by Muddy Waters Research, prompting investigations by the Ontario regulator and the RCMP.
The company and several former executives have since also been accused of lying to investors and attempting to mislead investigators.
A number of lawsuits involving Sino-Forest are still ongoing in the courts.
© 2013 The Canadian Press