TORONTO - Forestry and flooring manufacturer Sino-Forest, says it found no evidence of fraud after it an internal study conducted by it board.

The Hong Kong-based vertically integrated wood products firm, which trades on the Toronto stock exchange, suffered  suspension of trading in its stock extended by Canadian authorities after its business was described in June as a Ponzi scheme by investment analyst  Muddy Waters.

“To say that this has been a tough time for our employees, investors and our company as a whole would be a huge understatement," said Judson Martin, CEO and vice chair of the board. "A great deal of financial and reputational damage has been caused by unfounded accusations made by a short-seller, who we understand personally profited a great deal from the losses of others."

Sino Forest reportedly spent $32 million on the investigation. One key finding, according to analysts, is that China's real estate records systems vary throughout the country, and confirmation of forestry assets claimed by Sino Forest is far from transparent.

"Far from being a 'near total fraud' and 'Ponzi scheme' as alleged by Muddy Waters, Sino-Forest is a real company, with real assets and real revenue," Martin said.

The engineered wood flooring maker's CEO Allan Chan quit in August amid a continuing investigation by the Ontario Securities Commision, which suspended trading in Sino Forest stock. The stock value plunged 50 percent. Sino-Forest, manufactures flooring in China from its own plantations, said it would delay release of its latest quarterly results.