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Staff are seen at the Sino-Forest and Sino-Panel China headquarters in Guangzhou, Southern China on June 29, 2011.

Ontario's securities watchdog has moved closer to laying out its case against Sino-Forest Corp. and six former and current executives by sending enforcement notices that allege the Chinese forestry company misled investors.

The company said it received a notice from the Ontario Securities Commission last Thursday alleging that Sino-Forest engaged in conduct contrary to the province's securities act. The document cited sections of the act related to fraud, market manipulation and making untrue or misleading statements, although Sino-Forest did not give detail on which specific allegations are being made.

The notice "contains allegations of a serious nature," it said in a release Monday.

The OSC's move signals the likely beginning of a new phase in the saga of a company that, just a year ago, was the largest publicly traded forestry company on the Toronto Stock Exchange. Since then, it has collapsed under the weight of accusations that it massively overstated its assets – primarily forestland in mainland China – and last month sought court protection from its creditors. Sino-Forest is now trying to find buyers for its assets, and shareholders are unlikely to see a penny of return from what was once a $6-billion company.

The commission typically issues enforcement notices at the end of an investigation, identifying matters of concern and advising that staff are contemplating launching proceedings. The notices are intended to allow targets of investigations an opportunity to respond before formal allegations are unveiled.

Sino-Forest said it has learned that notices were also sent to company founder and former chief executive officer Allen Chan, as well as former top officials Albert Ip, Alfred Hung, George Ho and Simon Yeung. The company's chief financial officer, David Horsley, also received a notice, the company said.

Absent from the list is current CEO Judson Martin, who was appointed to the top job last summer after Mr. Chan resigned as CEO.

"The company is considering what steps it will take, including in relation to company personnel, as a result of the enforcement notice," Sino-Forest said in its release.

While Sino-Forest did not elaborate on the personnel matters it is reviewing, a number of the people who received enforcement notices are still employed at the company, including Mr. Horsley.

Mr. Hung, Mr. Ho and Mr. Yeung have been on administrative leave since last summer. Mr. Ho and Mr. Hung are still listed as executives on Sino-Forest's website, while Mr. Chan is listed as "founding chairman emeritus," which is a non-executive position. Mr. Ip resigned from Sino-Forest at the end of March, but agreed to serve as a consultant on a part-time basis.

The company said Monday the allegations contained in the enforcement notices are "consistent" with claims made in a cease trade order last August when the OSC halted trading of Sino-Forest's shares, citing concerns about possible fraud. The move came after short-seller Carson Block issued a scathing report alleging the company was a "Ponzi" scheme.

The OSC alleged at the time that the company and some of its officers, including Mr. Chan, "appear to be engaging or participating in acts, practices or a course of conduct related to its securities which it and/or they know or reasonably ought to know perpetuate a fraud."

The cease trade notice said the company appeared to have "engaged in significant non-arm's length transactions" and that some of its officials "appear to have misrepresented some of its revenue and/or exaggerated some of its timber holdings" in public filings "which may have been false or misleading in a material respect."

The TSX is planning to delist Sino-Forest shares on May 9. They haven't traded since August.

The company said Monday it "believes that it has co-operated" with OSC staff in the investigation.

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