The CINAR scandal was a major accounting scandal in Canada that came to light in March 2000 at CINAR, renamed to
Cookie Jar Group
Cookie Jar Entertainment Inc. (also known as Cookie Jar Group and originally known as CINAR; renamed as DHX Cookie Jar Inc. from 2012 until 2014, or simply just Cookie Jar) was a Canadian media (communication), media production and distribution ...
, one of the world's most successful children's television production companies at the time. It was exposed when investigators revealed that 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
Nelvana Enterprises, Inc. (; previously known as Nelvana Limited, sometimes known as Nelvana Animation and simply Nelvana or Nelvana Communications) is a Canadian animation studio and entertainment company owned by Corus Entertainment. Found ...
founder
Michael Hirsh, and former Nelvana president Toper Taylor for . The company was subsequently renamed Cookie Jar.
Background
CINAR was founded by the husband and wife team of
Micheline Charest
Micheline Charest (16 March 1953 – 14 April 2004) was a British-born Canadian television producer and founder and former co-chairman of CINAR (later Cookie Jar Entertainment). In 1997, Charest was ranked 19th in ''The Hollywood Reporters lis ...
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
Montreal ( ; officially Montréal, ) is the second-most populous city in Canada and most populous city in the Canadian province of Quebec. Founded in 1642 as '' Ville-Marie'', or "City of Mary", it is named after Mount Royal, the triple- ...
,
Quebec
Quebec ( ; )According to the Government of Canada, Canadian government, ''Québec'' (with the acute accent) is the official name in Canadian French and ''Quebec'' (without the accent) is the province's official name in Canadian English is ...
. Throughout the 1980s and 1990s, the company saw massive success with children's programming such as ''
Papa Beaver's Storytime
''Papa Beaver's Storytime'' (french: Les histoires du Père Castor) is an animated television series based on the Père Castor series of children's story books produced by French publisher's editor Paul Faucher. The series which was produced by C ...
'', ''
The Busy World of Richard Scarry
''The Busy World of Richard Scarry'' is an animated children's television series, produced by CINAR Animation and France Animation in association with Paramount Television, which aired from 1994 to 1997, first on Showtime, later on Nickelodeon, ...
'', Nickelodeon's ''
Are You Afraid of the Dark?
''Are You Afraid of the Dark?'' is a horror anthology television series. The original series aired on Nickelodeon from 1992 to 1996; the pilot episode aired respectively on YTV and Nickelodeon in 1990 and 1991. It led to two revival series, wi ...
'', ''
The Adventures of Paddington Bear
''The Adventures of Paddington Bear'' is an animated children's television series. It is based on the book ''Paddington Bear'' by Michael Bond and was written by Bruce Robb. It was produced by CINAR Corporation and Protecrea, in co-productio ...
'', ''
Caillou
''Caillou'' () is a Canadian educational children's television series which aired on Teletoon (both English and French versions), with its first episode airing on the former channel on September 15, 1997; it later moved to Treehouse TV, wi ...
'', ''
Zoboomafoo
''Zoboomafoo'' is a live-action/animated children's television series that originally aired on PBS from January 25, 1999, to June 7, 2001. It was formerly shown in public television (depending on the area) and was regularly shown on Sprout unt ...
'' and ''
Arthur
Arthur is a common male given name of Brythonic origin. Its popularity derives from it being the name of the legendary hero King Arthur. The etymology is disputed. It may derive from the Celtic ''Artos'' meaning “Bear”. Another theory, more w ...
''.
CINAR went public on the
Toronto Stock Exchange
The Toronto Stock Exchange (TSX; french: Bourse de Toronto) is a stock exchange located in Toronto, Ontario, Canada. It is the 10th largest exchange in the world and the third largest in North America based on market capitalization. Based in th ...
in 1993, and then on the
Nasdaq
The Nasdaq Stock Market () (National Association of Securities Dealers Automated Quotations Stock Market) is an American stock exchange based in New York City. It is the most active stock trading venue in the US by volume, and ranked second ...
one year later. By 1999, CINAR boasted annual revenues of and owned about of the children's television market. In 1996, CINAR acquired the library of the British animation studio
FilmFair
FilmFair was a British production company and animation studio that produced children's television series, animated cartoons, educational films, and television advertisements. The company made numerous stop motion films using puppets, clay ...
, which includeed television adaptations of Paddington Bear. CINAR shut down the studio in 1998. In February 1999, CINAR acquired the film library of Leucadia Film Corporation.
Scandal
The company collapsed in 2001, when an internal audit revealed 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) 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 and another 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.
Aftermath
On August 26, 2009, in a
separate case, the Superior Court of Quebec ruled that CINAR had plagiarized the work of Claude Robinson for its animated series ''
Robinson Sucroe
''Robinson Sucroe'' (also known as ''Robinson Sucroë'' in French) is an animated series created by France Animation in France and Cinar (now known as WildBrain) in Canada. In 2009, it was found to have infringed Claude Robinson's work ''Les ...
''. The series was based on a concept he had pitched to CINAR in 1986, but had been turned down. Robinson was awarded $5.2 million in damages, in a suit that resolved a 14-year dispute between the two parties.
On March 10, 2011, co-founder Ronald A. Weinberg returned to Montreal from vacationing in the
Caribbean islands and was promptly arrested for
securities fraud
Securities fraud, also known as stock fraud and investment fraud, is a deceptive practice in the stock or commodities markets that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in lo ...
after a warrant was issued for him to be taken into custody earlier that month.
On January 17, 2014, former CFO Hasanain Panju pleaded guilty to undisclosed crimes. The judge noted these crimes were "disgraceful" and placed a publication ban on details surrounding the trial. Panju was sentenced to four years in prison.
On May 12, 2014, Weinberg, John Xanthoudakis of Norshield Financial Group and Lino Matteo of Mount Real Corp. were charged with 26 counts of fraud in Montreal Superior Court. They were convicted on most of the counts on June 2, 2016, and in the trial Panju acted as a key Crown witness. On June 22, 2016, Weinberg was sentenced to 8 years and 11 months in prison, and the other two received sentences of 7 years and 11 months each. On May 3, 2019, Weinberg was fully paroled.
The CINAR affair was described thus by ''
The Globe and Mail'':
References
Accounting scandals
2000 in Quebec
2000s in Montreal
2000 in economics
2000 scandals
2000s economic history
Corporate scandals
Corporate crime
Crime in Montreal
Finance fraud
Fraud in Canada
Scandals in Canada
WildBrain
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