Montreal-based Cinar Corp, a producer of family films and children's television, watched its shares plummet this week after the company admitted that an internal review, prompted by tax fraud charges, could adversely affect its financial results.
"The financial and accounting impacts of the outcome of those reviews, although not yet determined, are expected to be greater than initially anticipated," the company said in a release. "However, the company expects that the outcome of such reviews will not undermine its financial strength or liquidity."
The company has been under investigation and undergoing an internal review since allegations surfaced in October that the company credited Canadian scriptwriters for work done by Americans in order to collect federal tax-credits on its film and TV productions.
Cinar's Class B shares, traded on the Toronto Stock Exchange, fell C$9.30 to C$26.95 on Monday, while the more narrowly traded Class A shares dropped $9.50 to $26.50. The company is in the midst of preparing its November 1999 year-end results, but has delayed the release of those statements, initially expected in February, until April.