The creditors of collapsed Chinese forestry group Sino-Forest have sued Allen Chan Tak-yuen, the company’s former chairman and chief executive, for C$3bn ($2.8bn) and accused him of fraudulently inflating revenues and assets.
The lawsuit, filed in Ontario by a litigation trustee who is responsible for trying to recover money from parties connected to the bankruptcy, is the latest multibillion-dollar action to be launched by investors. It comes two years after Canadian authorities formally accused Allen Chan and other former executives of Sino-Forest – a company once valued at more than $5bn – of fraud
The latest lawsuit alleged that Mr Chan, a Hong Kong entrepreneur and one-time newspaper columnist who founded the lumber company, caused Sino-Forest to “materially overstate the values of SFC’s revenues and assets and to conceal personal profits made in connection therewith”.