CINAR Sues for the Full Recovery of Remaining Amounts.

Business & Entertainment Editors

MONTREAL--(BUSINESS WIRE)--March 20, 2000

CINAR Corp. (the "Company") (TSE:CIF.A.) (TSE:CIF.B.) (NYSE:CINR) (Nasdaq:CINR) has today filed legal proceedings against Norshield International Limited, Globe-X Management Limited, Globe-X Canadiana Limited and Robert Daviault, an officer of Globe-X Management Limited and/or Globe-X Canadiana Limited, in the common law side of the Supreme Court of the Commonwealth of the Bahamas.

One month ago, the Board of Directors of CINAR Corp. was advised by the Company's auditors that approximately US$122 million of the Company's funds had been transferred to Norshield International Limited, an investment manager in Nassau, Bahamas, where the funds had apparently been invested in investment grade securities. The Board of Directors of the Company immediately instructed senior management to cause these securities to be transferred to the Company's accounts in North America.

On March 3, 2000, the Board of Directors first learned that the approximately US$122 million of investment grade securities were held not in the name of the Company but in the name of an affiliate of Norshield known as Globe-X Management Limited, which had caused approximately US$86 million of such securities to be margined to purchase commercial paper of its affiliate Globe-X Canadiana Limited.

This had been effected pursuant to an investment management agreement signed, purportedly on behalf of the Company, by its former Senior Executive Vice President and not previously disclosed to, nor approved by, the Board of Directors.

Representatives of the Company have been negotiating with representatives of Globe-X Management and Globe-X Canadiana to recover the Company's funds on an urgent basis. They have also been attempting to ascertain the underlying value of the commercial paper of Globe-X Canadiana, but management of Globe-X Management and Globe-X Canadiana have consistently refused to provide any substantive information with respect to the nature or value of the assets and liabilities of Globe-X Canadiana.

These negotiations have been extremely difficult, and on the advice of the Company's advisors conducting such negotiations, the Board of Directors of the Company determined that to prematurely disclose the names of the entities where these assets are located would likely have prejudiced the negotiations.

As previously announced, the Company was successful in arranging for the recovery on March 6, 2000, of approximately US$35 million. As announced on March 17, the Company has recovered a further sum of approximately US$10 million. As a result, Globe-X Management purportedly holds for the account of the Company commercial paper issued by Globe-X Canadiana in the principal amount of approximately US$76 million and having stated maturity dates extending from May through November 2000.

In its claim, CINAR seeks to have the investment management agreement declared null and void, the disclosure of all relevant facts to determine the value of the commercial paper and the collectibility thereof and the return of all funds paid or transferred to Norshield International Limited, Globe-X Management Limited and Globe-X Canadiana Limited together with other related relief.

"These proceeding were commenced after a thorough and lengthy investigation, and in consultation with the Company's external counsel", said Barrie Usher, President and Chief Executive Officer of CINAR. "Based on our findings, we have determined that these proceedings are required to protect the interests of the Company.

"We have also asked our legal counsel to provide the appropriate authorities with such information as they may require to enable them to conduct their own investigations. We wish to reaffirm to our shareholders, employees and other stakeholders that we will vigorously pursue the allegations made in the claim and that we are determined to see that full recovery is made."

In addition, the Company confirms that it has received, and that it is endeavoring to respond to, information requests from Telefilm Canada, Canadian Television Fund and other funding agencies. Pending receipt of satisfactory responses to these requests, funding from such agencies has been suspended.

In the interim, the currently committed productions of the Company will be funded using its existing cash resources. The Company believes it has, on a consolidated basis, sufficient cash and liquid assets on hand to meet all of its existing production commitments.

CINAR is an integrated entertainment and education company involved in the development, production, post-production and worldwide distribution of non-violent, quality programming and educational products for children and families. CINAR's Web site can be found at www.cinar.com.

This release may include information that could constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995 (U.S.). Forward-looking statements are identified by words such as "believe," "anticipate," "expect," "intend," "plan," "will," "may" and other similar expressions. Forward-looking statements in this document include, but are not necessarily limited to, those relating to the conclusion of the complaint filed by the company, the ability of the Company to satisfactorily respond to various authorities and its assessment of its current cash needs. Actual results or conditions may differ from those anticipated by these and other forward-looking statements. Such forward-looking statements are subject to a number of known or unknown risks and uncertainties.