TORONTO – As the Ontario Securities Commission began to make its fraud case against former executives of Sino-Forest Corp., objections were raised about whether a key OSC witness, forensic accountant Anthony Long, was testifying “outside the scope” of his role as an OSC investigator and drawing conclusions as an “expert.”
The objections intensified when a document prepared by Mr. Long and characterized by OSC counsel Hugh Craig as a memory aid was handed to the lawyers for five former Sino-Forest executives accused of participating in the alleged fraud.
“It’s fundamentally unfair to have this evidence given to us today,” said Markus Koehnen, a lawyer for four of the accused. He told the panel of OSC commissioners hearing the case that he had no time to consult his own financial experts, “let alone” his clients.
Rohit Kumar, one of the lawyers for former Sino-Forest chief executive Allen Chan, said the document appeared at first glance to be more than a memory aid.
“He’s connecting the dots” and “providing inferences to the panel,” Mr. Kumar argued.
Mr. Craig said he disagreed with the assessment of the lawyers for the accused because none of the information in documents prepared by Mr. Long is new.
Compiling numbers that connect back to Sino-Forest financial documents “is not opining,” Mr. Craig said.
“He is distilling information and presenting it to the panel. That is not expert territory — it is not even close.”
James Carnwath, the chair of the panel of OSC commissioners, said it is not out of the ordinary for a witness such as Mr. Long “to tell us what he’s found in the way of numbers and identify them.”
“The mere recital of what he found when he went looking does not raise any concern in the panel’s mind,” Mr. Carnwath said.
However, he gave the lawyers about 90 minutes to study the documents prepared by Mr. Long and said the panel would then listen to any specific objections about their content.
The OSC is trying to prove Hong Kong-based executives carried out a massive fraud at Sino-Forest., which traded at $6-billion on the Toronto Stock Exchange before its spectacular collapse.
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