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 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, lasting from May 2014 to 2016.
In 2004, following the scandal, CINAR was sold to a group led by
Nelvana
Nelvana Limited (; also known as Nelvana Enterprises, Nelvana International or Nelvana Digital; commonly known as Nelvana; stylized as "nelvana") is a Canadian animation studio and entertainment production company owned by Corus Entertainment s ...
founder Michael Hirsh, and former Nelvana president Toper Taylor for . The company was subsequently renamed to
Cookie Jar Group
The Cookie Jar Group, commonly known as simply Cookie Jar and formerly known as CINAR, was a Canadian animation studio, production company, media production and distribution company that existed from 1976 until it was folded into DHX Media, no ...
.
Background
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
Montreal is the List of towns in Quebec, largest city in the Provinces and territories of Canada, province of Quebec, the List of the largest municipalities in Canada by population, second-largest in Canada, and the List of North American cit ...
,
Quebec
Quebec is Canada's List of Canadian provinces and territories by area, largest province by area. Located in Central Canada, the province shares borders with the provinces of Ontario to the west, Newfoundland and Labrador to the northeast, ...
. Throughout the 1980s and 1990s, the company saw massive success with children's programming such as ''
Papa Beaver's Storytime
''Papa Beaver's Storytime'' () 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 CINAR, originally aired from 1993 to 19 ...
'', ''
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, that aired from 1994 to 1996, first on Showtime, later on Nickelodeon, ...
'', ''
Are You Afraid of the Dark?
''Are You Afraid of the Dark?'' is a children's horror anthology television series created by D. J. MacHale and Ned Kandel. The original series aired on Nickelodeon in the United States from August 15, 1992 to February 3, 1996, and also o ...
'', ''
The Adventures of Paddington Bear
''The Adventures of Paddington Bear'' is a French-Canadian-British animated children's television series based on the Paddington Bear stories written by Michael Bond, co-produced by the CINAR Corporation, FilmFair and Protecrea, in co-produ ...
'', ''
Wimzie's House
''Wimzie's House'' is a Canadian children's television series produced in Montreal which ran in the French language as ''La Maison de Ouimzie'' on Télévision de Radio-Canada in the morning and Radio-Québec in late afternoons beginning Septem ...
'', ''
Caillou
''Caillou'' ( ; , stylized in lowercase) is an animated educational children's television series that aired on Teletoon (both English and French versions) with the first episode airing on the former channel on September 15, 1997 until the fou ...
'', ''
Zoboomafoo
''Zoboomafoo'' is a live-action/animated children's television series that originally aired on PBS from January 25, 1999, to November 21, 2001. After the original run on public television, reruns were shown on Universal Kids#As PBS Kids Sprout/S ...
'' and ''
Arthur
Arthur is a masculine given name of uncertain etymology. Its popularity derives from it being the name of the legendary hero King Arthur.
A common spelling variant used in many Slavic, Romance, and Germanic languages is Artur. In Spanish and Ital ...
''.
CINAR went public on the
Toronto Stock Exchange
The Toronto Stock Exchange (TSX; ) is a stock exchange located in Toronto, Ontario, Canada. It is the List of stock exchanges, 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) is an American stock exchange based in New York City. It is the most active stock trading venue in the U.S. by volume, and ranked second on the list ...
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 television series, educational films, and television advertisements. The company made numerous stop motion films using puppets, cl ...
, 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.
Scandal
The company collapsed in 2000, 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''. 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
The Caribbean ( , ; ; ; ) is a region in the middle of the Americas centered around the Caribbean Sea in the Atlantic Ocean, North Atlantic Ocean, mostly overlapping with the West Indies. Bordered by North America to the north, Central America ...
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.
The CINAR affair was described thus by ''
The Globe and Mail
''The Globe and Mail'' is a Newspapers in Canada, Canadian newspaper printed in five cities in Western Canada, western and central Canada. With a weekly readership of more than 6 million in 2024, it is Canada's most widely read newspaper on week ...