Sino-Forest Corp. has lost an important member of its board of directors following the resignation of James Bowland.
Late on Friday the company announced that Mr. Bowland has stepped down, but offered no reason for his decision. His resignation comes amidst an Ontario Securities Commission investigation into Sino-Forest's business dealings in China.
As an independent director, Mr. Bowland was a part of a three-person team tasked with looking into fraud allegations first levelled by short-seller Muddy Waters LLC in June. The OSC eventually started its own investigation and the independent committee has been dealing with the regulator for the past few months.
Mr. Bowland is not the first board member to step down. In August the OSC ordered former Sino-Forest chairman and chief executive officer Allen Chan to leave the company, along with four other corporate officers. Though the ruling was later withdrawn because the OSC did not have the legal authority to level such a decision, Mr. Chan ultimately stepped down on his own.
Mr. Bowland was appointed to Sino-Forest's board only nine months ago. Before joining the board, he had been a managing director in corporate and investment banking at BMO Nesbitt Burns. He is also a chartered accountant.
Once Canada's biggest timber company, Sino-Forest has seen its market valuation plunge from more than $6-billion earlier this year to $1.2-billion. Though the company's shares continued to trade after Muddy Waters first accused Sino-Forest of impropriety, the OSC ultimately issued a temporary cease trade order in late August, halting all trading until the regulator has finished its investigation.
At a public hearing in September, the temporary order was extended until January 2012, ensuring that the investigation will wrap into the new year. Few details of the OSC's case have been released.