The Market Misconduct Tribunal (MMT) has found that former executives of China Forestry Holdings Limited were responsible for disclosing false or misleading information in the company’s IPO prospectus and annual results announcements. The tribunal identified significant overstatements in reported turnover for 2008 and 2009, with discrepancies of 91.56% and 99.99%, respectively.
The MMT also determined that the company fabricated customer information and falsified documents such as forestry rights certificates, logging permits, and bank statements to conceal these inaccuracies. The executives were aware of the falsifications when authorizing the IPO prospectus and financial reports.
Additionally, the MMT found that the executives engaged in insider trading by selling 119 million shares in January 2011, avoiding a loss of approximately $353 million. This action was taken after the executives learned from auditors about imminent risks to the company’s share value.
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