NEWS
04/26/2016 15:30 EDT | Updated 04/27/2017 01:12 EDT

Don't assume CEO of Sino-Forest knew everything going on in company: lawyer

TORONTO — A lawyer for the former CEO of Sino-Forest has told an Ontario securities tribunal that it can't be assumed that he knew everything that was going on within the forestry company.

Emily Cole, counsel for Allen Chan, began delivering closing arguments today in the Ontario Securities Commission case against five former Sino-Forest executives accused of perpetrating fraud before the firm collapsed in 2012.

Hugh Craig, the lawyer representing the OSC, argued last week that Chan was a hands-on CEO and the "controlling mind" behind several frauds that robbed shareholders of value.

Sino-Forest, which was established in 1994, was the first and largest foreign-owned forestry company in China.

The company conducted most of its business in that country even though it was based in Ontario.

At its peak, Sino-Forest was the most valuable forestry company listed on the Toronto Stock Exchange, with a market capitalization of $6 billion.

From June 2005 to March 2011, the company's shares rose by 340 per cent from $5.75 per share to $25.30 per share.

In addition to Chan, the OSC has accused former top executives Albert Ip, Alfred Hung, George Ho and Simon Yeung of lying to investors and misleading investigators by inflating the company's assets and revenue.

The OSC alleges the five men took part in "deceitful conduct" that included the fabrication of assets and revenue, undisclosed relationships with suppliers and customers and providing misleading documentation to support the alleged fraud.

The securities watchdog claims the executives misled investors by issuing false financial statements in every quarter from 2007 to 2010.

The Canadian Press