TORONTO, Sept. 26, 2011 /CNW/ - Northwest & Ethical Investments L.P.
("NEI Investments"), which manages Ethical Funds, Canada's leading
family of socially responsible mutual funds, and Comité syndical
national de retraite Bâtirente inc. ("Bâtirente"), a Québec based
labour sponsored retirement system, commenced a class action proceeding
today against Sino-Forest Corporation (TSX:TRE) on behalf of investors
who purchased Sino-Forest shares or notes from August 17, 2004 through
June 2, 2011.
The defendants in the lawsuit also include Sino-Forest's current and
former auditors, 15 financial firms that brought Sino-Forest share and
note offerings to market, certain forestry consulting firms, and 20
directors and senior executive officers of the company. The lawsuit
alleges that the defendants fundamentally misrepresented the integrity
of Sino-Forest's business operations and financial reporting, and
materially overstated its assets and financial results.
Sino-Forest's securities suffered severe market declines after the
release of an analyst's report on June 2, 2011, which questioned the
integrity of the company's asset valuations, revenues, business
practices, and financial reporting. Prior to the declines, Sino-Forest
was Canada's leading forestry company with most of its operations in
As Sino-Forest shareholders, NEI Investments, through its Ethical Funds
family, and Bâtirente, through its funds, had each raised governance
concerns in relation to the company prior to the release of the
critical analyst report. In January, NEI Investments filed a
shareholder proposal encouraging the company to adopt a revised
majority voting policy. This proposal was withdrawn when the company
committed to adopt the policy. Both NEI Investments and Bâtirente
withheld their votes for most of the company directors at the company's
last annual general meeting in May 2011.
"NEI Investments has a fiduciary duty to protect the interests of our
investors and in commencing this action we believe we are acting
strongly to uphold the integrity of the investment industry," says Bob
Walker, Vice President, Ethical Funds, NEI Investments. "In our
longstanding history of engaging with companies to promote responsible
corporate governance practices, this is the first time NEI Investments
has taken this last-resort approach to protect investors."
"When our members suffer losses in their retirement plans and those
losses result from the type of misconduct alleged in the statement of
claim, it is our duty to assist in seeking remedies from those who bear
responsibility," says Daniel Simard, General Co-ordinator, Bâtirente.
The Ontario Securities Commission ordered a suspension of trading in
Sino-Forest's securities on August 26, 2011, finding that:
"Sino-Forest, through its subsidiaries appears to have engaged in
significant non-arm's length transactions which may have been contrary
to Ontario securities laws and the public interest; Sino-Forest and
certain of its officers and directors appear to have misrepresented
some of its revenue and/or exaggerated some of its timber holdings by
providing information to the public … which may have been false or
misleading; and Sino-Forest and certain of its officers and directors
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…."
"In light of the decision made by the OSC, we felt it was both timely
and necessary to commence this action," says Mr. Walker. Mr. Simard
added: "In contrast to the prior class actions filed in this matter,
this action includes purchasers of notes as well as shares, and names
one of Sino-Forest's auditors during the period, which was not named in
the prior actions, as a defendant."
Plaintiffs in the lawsuit are represented by Kim Orr Barristers P.C. of
Toronto and Milberg LLP of New York.
ABOUT NEI INVESTMENTS
NEI Investments is a national investment firm with about $5 billion in
assets under management. In simple terms, NEI Investments' mission is
to provide high quality, unique investment solutions. The Northwest
Funds and Ethical Funds product suites provide investors with a full
range of fund management styles as well as conventional and sustainable
NEI Investments is owned 50% by the Provincial Credit Union Centrals and
50% by Desjardins Group, united in their focus to strengthen and serve
the cooperative financial movement across Canada. This backing of
experience and vast resources provides economies of scale and allows
NEI Investments to actively support business growth in these networks
as well as independent advisor channels.
NEI Investments has offices in Toronto, Vancouver and Montreal.
Bâtirente is a non-profit organization entrusted by the Confederation of
National Trade Unions (CNTU/CSN) to set up and promote a workplace
retirement system for its affiliated unions. More than 26,000 workers
participate in a Bâtirente retirement plan. Bâtirente funds have total
assets of about $850 million. Signatory to the Principles for
Responsible Investment (PRI), Bâtirente has developed a recognized
expertise in the area of responsible finance.
SOURCE NEI Investments
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