CINAR Co-Founder Signed For Investment
On Tuesday, March 21, 2000, CINAR Corp. announced that co-founder, Ron Weinberg, and former controller, Mario Ricci, signed documents approving the company's non-board-approved investments. CINAR's spokeswoman, Suzan Ayscough, said, "The documents in question were signed either by Ron Weinberg alone, or by Mr. Weinberg and Mr. Panju or by Mr. Ricci." Previously, CINAR reported that their now fired senior executive VP Panju acted alone in investing the money. On Monday, March 20, 2000 [AF 3/21/00], CINAR announced that they had filed suit against three companies and one individual involved in the investment scandal. In the lawsuit, CINAR claims that Norshield International Ltd. of the Bahamas and affiliates Globe-X Management Ltd. and Globe-X Candiana Ltd., and Robert Daviault of Globe-X Management demonstrated "deceit and conspiracy" to misrepresent where CINAR's invested money was being funneled. CINAR alleges that Globe-X Management promised US$86 million of CINAR's funds to RBC Dominion Securities Inc. to secure a debt Globe-X owed. However, CINAR was led to believe that their money was clear and free. CINAR claims that the investment is void because the board of directors was not involved in the process. In a statement, Globe-X Management said the deal with CINAR mandated it to enhance returns on CINAR's bond portfolio, and that "while there are staged maturities, [the] maturities would normally terminate by November 30, 2000." Globe-X states they have already let CINAR prematurely access the funds to the tune of $46 million even though scheduled maturities were only $25 million. In addition, some interesting coincidences came to light at the Tuesday press conference. RBC Dominion, the bank Globe-X Management allegedly promised CINAR securities to, is an affiliate of the Royal Bank of Canada who is CINAR's bank. In turn, Norshield International is a reported affiliate of Norshield Financial Group (NFG), which is based in Montreal, same as CINAR. It has also been learned that Ricci, who left CINAR in November and signed documents okaying the non-approved investments, now works for NFG. Ricci was hired at NFG as vice president of finance one month after leaving CINAR. The extent of the involvement between NFG and Norshield International is also in question. NFG CFO Dave Smith said to THE GLOBE AND MAIL, that Norshield International has a licensing agreement to use the "Norshield" name and that NFG does provide "certain consulting and advisory services" to Norshield International, but that is all. Smith said that no companies directly under NFG are based in the Bahamas. However, NFG's CEO John Xanthoudakis on the NFG Web site is quoted as saying that their "international group of companies" work out of "Canada, U.S.A., Europe and the Bahamas." Commenting on the Web site, Smith said, "Whoever wrote it may have got it wrong." Even with the new information on the scandal, the Toronto Stock Exchange and Nasdaq officials still haven't deemed CINAR stock kosher enough to begin trading again. CINAR stock stopped trading March 9, 2000.