MONTREAL — Quebec Securities Commission fined Cinar Corp. founders Ronald Weinberg and Micheline Charest C$1 million ($613,000) each on Friday and barred them from being directors or executives at any publicly traded Canadian company for five years.
Fine, the biggest imposed by the regulator, follows a long investigation into allegations of tax and financial irregularities at the Montreal-based TV producer and distributor.
Weinberg and Charest were fired from Cinar two years ago when it was revealed that the company had invested $122 million in offshore accounts without board approval. Cinar’s stock has since been delisted from the Toronto and Nasdaq stock exchanges.
“We strongly believe that with a new board of directors, Cinar has a very bright future,” said Charest and Weinberg in a statement. “Together with all of the other major shareholders of Cinar, we will be keenly interested in watching the company’s future success.”
The settlement with the Quebec Securities Commission contains a long list of allegations, notably that Cinar improperly obtained film tax credits for scripts that were said to be Canadian but were written by Americans. The settlement is not an admission of guilt by Charest and Weinberg.
A long-awaited Cinar shareholders meeting — the first since an audit committee discovered that $122 million in Cinar funds had gone missing — will be held in late April. There is speculation that a new board of directors will be announced at the meeting.
The Quebec Securities Commission ruling follows the provincial Crown Attorney’s decision two months ago not to press charges against anyone at Cinar after a lengthy investigation into the tax-fraud allegations.
Charest and Weinberg still face a string of civil lawsuits on both sides of the border from irate shareholders. The Quebec Securities Commission hearing Friday was held behind closed doors because it was felt information in the hearing could be damaging to Weinberg and Charest in the civil cases.