Toronto: Chinese timber company Sino-Forest Corp, which is being investigated for fraud, said on Friday it is filing for bankruptcy protection, putting itself up for sale and filing a lawsuit against the research firm that accused the company of exaggerating its holdings in China.
Sino-Forest said it will implement a restructuring plan if the company doesn't receive a suitable takeover offer.
"We believe the full value of our assets will only be achieved if we are able to continue operating the business, and repair and preserve relationships with our customers and suppliers," Sino-Forest chief executive and vice-chairman Judson Martin said in a statement after the filing to the Ontario Superior Court.
Sino-Forest was once Canada's most valuable publicly-traded forestry business, but shares plunged last year after short-seller Muddy Waters Research alleged that the company exaggerated its assets.
Under investigation
Securities regulators in Canada suspended trading in the shares on the Toronto Stock Exchange. The company is under investigation by Canada's national police force.
Sino-Forest's shareholders in Canada and the US have also sued, alleging fraud at the company. The company, whose chairman and CEO resigned after trading of the shares was halted, has denied the fraud charges.
Sino-Forest said Friday that it is pursuing a lawsuit against Muddy Waters Research and its research director Carson Block, as well as others who have accused the company of fraud.
Block declined to comment on the lawsuit as he had not seen it, but repeated his assertion.
"This is yet another indication of what we have said all along, that Sino-Forest's management has committed a massive fraud and has deceived its shareholders and creditors," he said.
