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Posted by Cinar goes down on April 18, 2000 at 16:12:22:

Mounties unveil Cinar probe
Firm accused of subbing US writers

By BRENDAN KELLY, April 18, 2000

MONTREAL -- Canadian children's TV producer Cinar
received at least C$7.8 million ($5.4 million) in Quebec
provincial tax credits for shows that were written by
American scriptwriters and did not qualify as Canadian
content, according to documents filed in a Quebec court by
the Royal Canadian Mounted Police.

At the request of Heritage minister Sheila Copps, the
Mounties have been investigating the Montreal-based TV
company since last October.

The court documents are the first details unveiled so far by
the Canuck police regarding the lengthy Cinar probe. The
Mounties allege the company put Canadian names on scripts
actually written by U.S. writers in order to fulfill the
Canadian content requirements of the tax-credit program.

The RCMP has yet to reveal publicly how much money
Cinar netted from the federal tax-credit program in the
alleged scheme, as federal authorities have refused to
cooperate with the police, citing tax confidentiality rules.

According to the RCMP documents, several top Cinar execs,
including co-CEO Ronald Weinberg, asked former Cinar
employee Thomas Lapierre to create subcontracts that would
be used to pay U.S. scriptwriters.

At the same, Lapierre's name appeared on the official credits
of the shows. The series that carried Canadian names on the
credits but were really penned by Americans included "Are
You Afraid of the Dark," "Chris Cross," "The Busy World
of Richard Scarry" and "The Country Mouse and the City
Mouse Adventures."

Lapierre told the Mounties that Weinberg and other Cinar
execs told him to draw up subcontracts for American writers
Don Rifkin and Gary Cohen for episodes of the series
"Chris Cross."

Weinberg also asked Lapierre to set up a subcontract with
American writer David Ehrman for 12 episodes of the series
"Richard Scarry." In these cases, the U.S. scribes were not
included in the documents filed with the Canadian funders,
according to the RCMP.

Cinar execs had no comment on the allegations, and a
spokesman said the company has yet to be contacted by the

At the same time, speculation is increasing that Cinar
founders Weinberg and Micheline Charest -- who were
forced out of their positions last month but are still the
majority shareholders -- are in talks to sell all or parts of the

Reps from both CanWest Global and Nelvana have said they
are interested in acquiring some of Cinar's assets, but the
pending class-action lawsuits and other legal question marks
remain a major hurdle to any potential deal.

A Cinar spokesman said new management has been brought
in to fix the company, not sell it.

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