Monday, December 3, 2012

OSC targets Ernst & Young

"The Ontario Securities Commission has accused Ernst & Young LLP of failing to conduct a proper audit of failed forestry firm Sino-Forest Corp. In a rare move, the commission has levelled allegations against a firm’s auditors, saying Ernst & Young did not perform to “relevant industry standards” during their time as auditors between 2007 and 2012."

"The OSC issued fraud allegations against Sino-Forest and former senior executives in May. The case has not yet gone to a hearing."

http://www.theglobeandmail.com/globe-investor/osc-accuses-ernst-young-of-improper-sino-forest-audit/article5913025/

This blogger identified the obvious problem early on ...

"First on the public interest radar should be the all too cozy relationship between the auditor signing off on the apparently bogus financials that everybody is relying on and a bloated BoD with more alumni from Ernst and Young LLP than keys to the executive washroom.

Thomas M. MaradinVice-President, Finance (Corporate)
Joined Sino-Forest in 2005; previously worked five years for several multi-national corporations in financial reporting and internal control, regulatory compliance and system upgrading; previously worked fifteen years for Ernst & Young LLP, providing professional services in audit, taxation, risk management, strategic and business planning.
James (Jamie) M.E. Hyde, CA, C.Dir
Toronto

Director since 2004; previously Vice President, Finance and Chief Financial Officer, GSW Inc., Executive Vice President and Chief Financial Officer, Resolve Business Outsourcing Income Fund, Former Partner, Ernst & Young LLP, where he provided for 24 years a board range of professional services to public and private companies.
Garry J. West
Toronto
Joined the Board in February 2011; former Partner at Ernst & Young; With 35 years of extensive financial experience including auditing, corporate restructuring, public financings and strategic planning initiatives for a number of major organizations; Director and Chair of the Audit Committee for two other TSX-listed companies; Fellow of the Ontario Institute Chartered Accountants.


Our next area of interest are the unmitigated and sickening public touts from the likes of grossly conflicted Dundee "analyst" Mr. Richard Kelertas. Before the chit hit the fan he insisted Sino-Forest was a “class act in timberland management in China,”. Its one offensive thing to be professionally ignorant, another to deny the truth completely.

Fortunately for the public's blood pressure the powers that be have muzzled more commentary from Mr. Kelertas as every word will inevitably be placed under a judge's nose as evidence ... an outcome that should have been easily recognized the day the Muddy Waters report was released."

NOTE - Mr. Kelertas no longer works at Dundee.