Cinar''s current production activities could be at risk as financing from federal funding body Telefilm Canada has been suspended pending the results of investigations into the company''s activities. Canadian Television has also cut off its funding to Cinar.

Once a stock market darling with a wholesome family image, Cinar has been under a rapidly growing cloud of suspicion over the last year, and particularly in the last month, during which time it admitted its financial records might be unreliable.

Cinar''s downward spiral began last autumn after allegations emerged that the company had credited Canadian writers for the work of American scriptwriters in order to fraudulently claim Canadian tax credits.