Cinar scandal



Cinar was a Canadian media production and distribution company, founded in 1976 in New Orleans before moving to New York City and later Montreal. Their known works are the first eight seasons of mh:besttvshows:Arthur, The Busy World of Richard Scarry, Are You Afraid of the Dark?, the first three seasons of Caillou, mh:besttvshows:The Little Lulu Show, Mona the Vampire and mh:besttvshows:Zoboomafoo.

But however, in March 2000, the company and its founders were involved in a scandal of a high level fraud would not only permanently ruin the company's reputation, but also permanently ruin the reputations of the company's founders, Ronald A. Weinberg and Micheline Charest. In 2004, following the scandal, the company changed its name to Cookie Jar Group, with later prints of Cinar's shows removing all references to the company's old name.

Pre-scandal
On January 18, 2000, The Jim Henson Company sued against Cinar for Wimzie's House, claiming the series' puppets and merchandise violated its copyright and trademark rights on The Muppets. Cinar and its licensees Eden LLC and Carson-Dellosa Publishing Company denied any wrongdoing or liability for infringement. A confidential settlement allowed Cinar to continue broadcasting the series, selling the show's merchandise and a mechanism for preserving the distinctive look of Jim Henson's Muppets in the future productions of the company.

The Scandal
In March 2000, Cinar founders Micheline Charest and Ronald A. Weinberg were caught in trouble, when an internal audit revealed that about US$167 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 Canadian content. The names of Canadian citizens, generally non-writers connected to Cinar, including Charest's sister Helene, via the alias Eric Alexandre (Eric and Alex are the names of the sons of Micheline Charest and Ronald A. Weinberg) were credited for the works. While the province of Quebec did not file criminal charges, 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 along with 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 "piggy bank" and schemed to transfer funds out from the company through a series of complicated transactions to their own offshore holding companies.

In 2001, as part of a settlement agreement with the Commission des Valeurs Mobilières du Québec (Quebec Securities Commission) Charest and Weinberg agreed to pay $1 million each and were banned from serving in the capacity of directors or officers at any publicly traded Canadian company for five years. There was no admission of guilt and none of the allegations has been proven in court. Charest never lived to see a possible outcome, as she died on April 14, 2004, due to complications ensued after an elective plastic surgery.

Aftermath
In March 2004, Cinar was purchased for more than CA$190 million by a group led by Nelvana founder Michael Hirsh and former Nelvana president Toper Taylor. The company changed its name to Cookie Jar Group.

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. Cookie Jar was also ordered to destroy the master tapes for Robinson Sucroe.

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, co-founder Ronald 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.

On October 22, 2012, DHX Media acquired Cookie Jar Group for CA$111 million; the purchase made DHX the world's largest independent owner of children's television programming. At the end of 2014, Cookie Jar Group was folded into DHX Media. In December 2019, DHX changed its name to WildBrain, after the name of another studio called WildBrain Entertainment that it acquired in 2010.

After Season 15, Cookie Jar stopped co-producing Arthur, with WGBH (a PBS station in Boston) moving the show's animation services to 9 Story Media Group and later Oasis Animation.