Friday the 13th seemed like a good day for
Canadian Mounties to serve a search warrant on the Toronto headquarters offices
of engineering firm SNC – Lavalin, apparently looking for evidence in the case
of $56 million in improper payments which led to the resignation last month of three
of the firm’s top executives, including CEO Pierre Duhaime. The company’s internal investigation
disclosed Duhaime had signed off on improper payments to two undisclosed agents
on large construction projects, and the firm reported the ethical breach to the
government. However, SNC – Lavalin refuses to identify the projects involved by
name or by location.
The other two departing executives were Vice President
of Finance Stepahne Roy, and Vice President of Construction Riadh Ben Aissa.
Apparently Ben Aissa has fled Canada for Tunisia. The company reports he “is
believed to have significant knowledge about most of the investigated
transactions, but has not been [interviewed] despite a request to his counsel.”
The search warrant and the presence of uniformed
Mounties in the headquarters building lobby drove the price of SNC – Lavalin stock
down more than four percent Friday. Earlier this month, certain shareholders
filed a class action lawsuit seeking $250 million in damages relating to the
undocumented payments.
Meanwhile the World Bank has suspended bidding on
new projects in Bangladesh while the bank completes an investigation into the
engineering firm’s potential improprieties there. The bidding suspension is holding
up World Bank funding for a $1.2 billion bridge construction project over the
Padma River in Bangladesh. While the Mounties haven’t jailed anyone yet, with
SNC – Lavalin operating in over 100 different countries, it may be that still
more international construction projects will be arrested.
