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CINAR scandal
The CINAR scandal was a major accounting scandal in Canada that came to light in March 2000 at CINAR, one of the world's most successful children's television production companies at the time. It was exposed when investigators revealed that US$122 million was invested into Bahamian bank accounts without the board members' approval. The scandal resulted in Canada's longest criminal trial ever brought before a jury.
In 2004, following the scandal, CINAR was sold to a group led by Nelvana founder Michael Hirsh, and former Nelvana president Toper Taylor for CA$190 million. The company was subsequently renamed to Cookie Jar Group. They would be acquired by DHX Media (later known as WildBrain) in 2012 and then folded 2 years later.
CINAR was founded by the husband and wife team of Micheline Charest and Ronald Weinberg in 1976 in New York City after organizing an event for a women's film festival, and later moved its operations to Montreal, Quebec. Throughout the 1980s and 1990s, the company saw massive success with children's programming such as Papa Beaver's Storytime, The Busy World of Richard Scarry, Are You Afraid of the Dark?, The Adventures of Paddington Bear, Wimzie's House, Caillou, Zoboomafoo and Arthur.[citation needed]
CINAR went public on the Toronto Stock Exchange in 1993, and then on the Nasdaq one year later. By 1999, CINAR boasted annual revenues of CA$150 million and owned about CA$1.5 billion of the children's television market. In 1996, CINAR acquired the library of the British animation studio FilmFair, which included television adaptations of Paddington Bear. CINAR shut down the studio in 1998. In February 1999, CINAR acquired the film library of Leucadia Film Corporation.
The company collapsed in 2000, when an internal audit revealed US$122 million was invested into Bahamian bank accounts without the board members' approval. CINAR had also paid American screenwriters for work while continuing to accept federal grants and tax credits for the production of domestic content, although the names of Canadian citizens (generally non-writers connected to CINAR, including Charest's sister Helene via the alias Erika Alexandre (Eric and Alex are the names of the sons of Micheline Charest and Ronald A. Weinberg)) were credited for their work.
While criminal charges were not filed, CINAR denied any wrongdoing, choosing instead to pay a settlement to Canadian and Quebec tax authorities of CA$17.8 million and another CA$2.6 million to Telefilm Canada, a Canadian federal funding agency. The value of CINAR's stock plummeted, and the company was soon delisted.
There was some speculation that CINAR's CFO Hasanain Panju was the mastermind behind the investment scheme. Other individuals believed to have helped with the scheme include John Xanthoudakis of Norshield Investment Group and Lino Matteo of Mount Real Corporation. It was alleged that Charest and Weinberg (and later Panju) used CINAR as a personal 'piggy bank' and schemed to transfer funds out from the company to the Bahamas through a series of complicated transactions to their own offshore holding companies.
In 2001, Charest and Weinberg agreed to pay $1 million each, and were fired from the company's board of directors.
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CINAR scandal
The CINAR scandal was a major accounting scandal in Canada that came to light in March 2000 at CINAR, one of the world's most successful children's television production companies at the time. It was exposed when investigators revealed that US$122 million was invested into Bahamian bank accounts without the board members' approval. The scandal resulted in Canada's longest criminal trial ever brought before a jury.
In 2004, following the scandal, CINAR was sold to a group led by Nelvana founder Michael Hirsh, and former Nelvana president Toper Taylor for CA$190 million. The company was subsequently renamed to Cookie Jar Group. They would be acquired by DHX Media (later known as WildBrain) in 2012 and then folded 2 years later.
CINAR was founded by the husband and wife team of Micheline Charest and Ronald Weinberg in 1976 in New York City after organizing an event for a women's film festival, and later moved its operations to Montreal, Quebec. Throughout the 1980s and 1990s, the company saw massive success with children's programming such as Papa Beaver's Storytime, The Busy World of Richard Scarry, Are You Afraid of the Dark?, The Adventures of Paddington Bear, Wimzie's House, Caillou, Zoboomafoo and Arthur.[citation needed]
CINAR went public on the Toronto Stock Exchange in 1993, and then on the Nasdaq one year later. By 1999, CINAR boasted annual revenues of CA$150 million and owned about CA$1.5 billion of the children's television market. In 1996, CINAR acquired the library of the British animation studio FilmFair, which included television adaptations of Paddington Bear. CINAR shut down the studio in 1998. In February 1999, CINAR acquired the film library of Leucadia Film Corporation.
The company collapsed in 2000, when an internal audit revealed US$122 million was invested into Bahamian bank accounts without the board members' approval. CINAR had also paid American screenwriters for work while continuing to accept federal grants and tax credits for the production of domestic content, although the names of Canadian citizens (generally non-writers connected to CINAR, including Charest's sister Helene via the alias Erika Alexandre (Eric and Alex are the names of the sons of Micheline Charest and Ronald A. Weinberg)) were credited for their work.
While criminal charges were not filed, CINAR denied any wrongdoing, choosing instead to pay a settlement to Canadian and Quebec tax authorities of CA$17.8 million and another CA$2.6 million to Telefilm Canada, a Canadian federal funding agency. The value of CINAR's stock plummeted, and the company was soon delisted.
There was some speculation that CINAR's CFO Hasanain Panju was the mastermind behind the investment scheme. Other individuals believed to have helped with the scheme include John Xanthoudakis of Norshield Investment Group and Lino Matteo of Mount Real Corporation. It was alleged that Charest and Weinberg (and later Panju) used CINAR as a personal 'piggy bank' and schemed to transfer funds out from the company to the Bahamas through a series of complicated transactions to their own offshore holding companies.
In 2001, Charest and Weinberg agreed to pay $1 million each, and were fired from the company's board of directors.