Ethics Newsline®

Special to Newsline from Canadian correspondent Errol P. Mendes

MONTREAL
The Quebec Securities Commission has terminated a two-year probe into financial scandals at one of Canada’s leading animation companies, Cinar Corp., with a $1.3 million settlement imposed on the company’s founders, Micheline Charest and Ronald Weinberg.

In addition to imposing the settlement, the largest in Quebec history, the couple is also banned from serving as directors or officers of any publicly traded Canadian company. Moreover, even though they still hold the majority of shares in the company, they are banned from voting for any new Cinar director for a five-year period.

The settlement comes not long after Canadian authorities decided not to file criminal charges in connection with misuse of funds at the company and the receipt of tax credits for Canadian authors who turned out to be American.

Large sums of money have been paid back to Cinar and Canadian tax authorities by the couple, without any admission of guilt.

While the allegations were not considered to be securities regulation breaches they were regarded as abuse of their powers as directors. The company, which was a huge market success before the scandals broke, producing such well-known animation cartoons as “Arthur,” is still involved in civil actions against the founders and a former chief financial officer who allegedly was involved in the financial improprieties.