TORONTO--A group of Canadian and other investments banks agreed
to pay a total of 32.5 million Canadian dollars ($26.1 million) to
settle claims related to their role as underwriters to help
Sino-Forest Corp. sell stock, in what is believed to be one of the
largest settlements of its kind in Canadian history.
The dealers "do not admit any wrongdoing or liability" under the
agreement, which would settle shareholder allegations that
Sino-Forest's public filings "contained false and misleading
statements about (its) financial results, assets, business and
transactions," according to a copy of the pact filed with the
Ontario Superior court. The agreement still needs court
approval.
"We believe this to be the largest underwriter settlement in
Canadian history," said a Dimitri Lascaris, a lawyer for
Sino-Forest investors.
The dealer group includes the Canadian arm of Credit Suisse
Group AG, TD Securities Inc., Dundee Securities Corp., RBC Dominion
Securities Inc., Scotia Capital Inc., CIBC World Markets Inc.,
Merrill Lynch Canada Inc., Canaccord Financial Ltd., Merrill Lynch
Canada, and Maison Placements Canada Inc., according to the court
documents.
Representatives for the dealers either couldn't be reached for
comment or had no immediate comment.
Sino-Forest was once one of Canada's largest forest-products
companies listed in Canada, but it collapsed in 2012 amid
allegations that it fraudulently inflated the value of its timber
assets in China.
The latest agreement comes after Ernst & Young LLP agreed in
2013 to pay C$117 million to settle shareholder allegations related
to its role as Sino-forest's auditor, and last year the Ontario
Securities Commissions fined Sino-Forest's former chief financial
officer C$700,000 for breaching Ontario securities laws and banned
the executive from being a director or officer of any Ontario
public company.
The commission is in the middle of holding hearings, alleging
fraud against five other former Sino-Forest executives, who are
contesting the allegations.
Write to Ben Dummett at ben.dummett@wsj.com
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