Ousted founders' pal ousts Cinar board
Despres uses controlling shares to stage showdown
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Ronald Weinberg and Micheline Charest were fired from Cinar after revelations that the company had allegedly engaged in tax-credit fraud two years ago.
The scandal widened when it was revealed that $122 million had been invested in suspicious offshore high-risk funds without board approval.
Last month Charest and Weinberg were fined C$1 million ($627,000) each by the Quebec Securities Commission and barred from voting with their controlling stake for five years.
However, they signed a voting trust agreement with Quebec businessman Robert Despres late last week and he used that 63.7% of controlling shares to stage a showdown with the new management at Cinar's first annual meeting in two years.
Draws up own slate
Despres nixed current management's attempt to elect a new board that would have included present Cinar chair Lawrence Yelin and Cinar president and CEO Barrie Usher. He pushed through his own nine-person slate of directors.The new Cinar board includes Despres; Marcel Aubut, the former co-owner of NHL franchise the Quebec Nordiques; Gordon Craig, one of the founders of specialty channels TSN and the Discovery Channel (Canada); Douglas Holtby, previously president and CEO of Vancouver-based broadcaster WIC Western Intl. Communications; Normand Beauchamp, founder of Quebec TV and radio company Radiomutuel; Lisa de Wilde, formerly president and CEO of the Astral Television Networks; Los Angeles-based TV exec David L. Simon, who was previously head of DreamWorks Television Animation Studios in Glendale, California; and ex-Domtar CEO Pierre Desjardins.
Despres said he was acting independently of Charest and Weinberg, and that it was his decision alone to nominate a new set of directors.
"I represent the majority of votes and I think it's only natural that the person with the majority of votes should be able to name a certain number of the members of the board," said Despres. "I wanted a slate of directors who represented the Canadian industry that Cinar is a part of and I also wanted someone from the U.S. who understood the animation business. I am not passing judgement on the other proposed board."
Despres and Yelin talked over the weekend to find a compromise, but the negotiations were unsuccessful. Despres had suggested delaying the meeting a week to continue talks, but Yelin said the board felt this was pointless as Despres has a strangle-hold on the votes.
The fate of Cinar president and CEO Barrie Usher was unclear Monday.
He had previously said he would resign but would stay on-board until a replacement was found.
Despres would only say that he wants to meet with Usher as soon as possible.
Usher made an emotional speech at the meeting where he talked of the difficulties he faced trying to extricate the company from a complicated web of financial and legal problems.
Cinar chief financial officer George Rossi said the impact of the events of the past couple of years cost Cinar $188 million.
