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Cinar investigated for tax fraud

Montreal, Canada-based LE JOURNAL DE MONTREAL reported Friday, October 15that Cinar, producer of such shows as PBS' ARTHUR, THE BUSY WORLD OFRICHARD SCARRY, ARE YOU AFRAID OF THE DARK and WIMZIE'S HOUSE, substitutedthe names of Canadians for work done by non-Canadians to become eligiblefor tax credits that were intended to help Canada's film industry. Althoughthe film company was not named in the newspaper story, the CanadianBroadcasting Company (CBC) reports that on Friday, in the Canadian House ofCommons, Bloc Quebecois Member of Parliament Stephane Bergeron identifiedthe company as Cinar Films Inc. To qualify for Canadian federal taxcredits, the producer of any film or television show must be Canadian. Thisalso applies to the director, screenwriter and lead actors. Radio-Canada,the CBC's French network, interviewed a screenwriter in the United Stateswho said he contributed to a Cinar TV show, but never received credit.According to a statement released by Cinar, "The allegations in the mediaappear to pertain to episodes produced several years ago and have norelation to the current operations and activities of the company. Basedupon its review to date, Cinar believes that such allegations will not haveany material adverse impact on the financial position or results of thecompany. Nonetheless, the Board of directors has given a special mandate tomembers of the Audit Committee of the Board, composed only of outsidedirectors, to review the various issues associated with the allegations.The Committee has been instructed to report its findings andrecommendations to the Board of directors at the earliest possible date.The Board reaffirms its intent to cooperate with all competentauthorities." Cinar was founded in the 1970s by Micheline Charest and herhusband, Ronald Weinberg.For more about Cinar read Deborah Reber's "All in the Family: Rated 'G' Animated Programming" in the December 1998 issue of Animation World Magazine.