Ontario Securities Commission refers Sino-Forest case to Royal Canadian Mounted Police to investigate allegations Toronto-listed firm defrauded investors

TORONTO, Ontario , November 10, 2011 () – The Ontario Securities Commission said Thursday it has referred the case of Chinese timberland company Sino-Forest Corp. and allegations the company defrauded investors to Canada's national police force.

Carolyn Shaw-Rimmington, a spokeswoman for the provincial regulator, said Thursday the commission has called in the Royal Canadian Mounted Police as it continues with its own investigation into allegations Toronto-listed Sino-Forest overstated the value of its assets and revenue.

Sino-Forest was once the most valuable forestry company listed on Canada's national stock exchange, the Toronto Stock Exchange. However, its shares were hammered this summer after short-seller Muddy Waters Research first alleged that the company exaggerated its assets.

The RCMP and Sino-Forest didn't respond to messages seeking comment.

The Ontario Securities Commission previously placed a freeze on all trading in the company's shares.

The company's board has also launched an investigation. Sino-Forest's former chairman and chief executive Allen Chan stepped down earlier this year.

Sino-Forest manages tree plantations in China, sells logs and standing timber and manufactured engineered-wood products. Its management offices are primarily in Hong Kong, China and Ontario, Canada.

Muddy Waters and its founder, short seller Carson Block, have described the company, which has raised more than $3.5 billion from investors through debt and equity markets, as a massive pyramid scheme.

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