Sino-Forest Confirms Canadian Police Probe into Fraud Allegations

TORONTO (Reuters) - Sino-Forest Corp (TRE.TO: Quote) has confirmed that it is being investigated by Canada's national police force over allegations of fraud.

In an emailed statement, the Canadian-listed, China-focused company said that it is cooperating with the Royal Canadian Mounted Police (RCMP) in their investigation, but gave no details. An RCMP spokesperson was not immediately available for comment.

In June, the Ontario Securities Commission launched an investigation into Sino-Forest, after short seller Carson Block and his Muddy Waters firm accused the company of fraudulently exaggerating its assets. Sino-Forest is the owner and operator of tree plantations in China.

Sino-Forest was the largest forestry company listed on the Toronto Stock Exchange until its shares collapsed after the fraud allegations surfaced.

The company is conducting its own independent review of the accusations, which it expects to have completed by the end of the year.

Trading in Sino-Forest's shares has been suspended since August, and it is the target of several possible lawsuits.

(Reporting by Julie Gordon; editing by Peter Galloway)