Investors, stock market analysts and even insiders at Quebec-based SNC-Lavalin are asking tough questions and raising major concerns, as the international corruption probe of the company continues.
CBC News reports that a “poison pen” email they received from “an angry insider at engineering giant SNC-Lavalin has accused the company’s former head of construction, Riadh Ben Aissa, of secretly funneling money to members of Libya’s Gadhafi family.” According to the email, “Since the 1990s Ben Aissa has organized 300 million (dollars in) payments to shell companies acting as intermediaries between SNC-Lavalin and the Libyan government (i.e., the Gadhafi family).”
“Meanwhile, Ben Aissa also took tens of millions of dollars in commissions from suppliers for international projects in North Africa, which have become vehicles for most of the graft and corruption…Finally, he created his own companies, which are used for the provision of goods and services to projects and SNC-Lavalin and catch dozens of other millions,” continues the email.
The email goes on, “They have all benefited financially from this association as recipients of bonuses, stock options, dividends, directors’ fees, etc., during the golden years of juicy profits from Libya. The question is whether the Council and the Office of the President is so afraid of the consequences of correcting this situation they will continue to risk everything.”
The Toronto Star reports that the Caisse de depot et placement du Quebec, Canada’s largest pension funds manager and one of SNC’s largest investors, wrote to SNC, “Like other investors, many of our questions about recent events and the many allegations made about the company remain outstanding and we feel we must express to you our malaise…The Caisse expects more transparency in this respect going forward given the extremely serious nature of these allegations, and that the measures that will be put in place to ensure these events don’t happen again are made public.”
In relation to the transmission line engineering, procurement and construction contract recently “awarded” to SNC-Lavalin by AltaLink, the Star continues, “But optimism over the contract was lowered in some analysts given that AltaLink is owned entirely by SNC.”
CBC News reports, “The arrest of a former SNC-Lavalin executive in Switzerland has led to a chorus of investors and insiders demanding a broader investigation into the company’s construction operations…Insiders within the company, who asked for anonymity for fear of repercussions to their jobs, fear there could be a potential political chill on any investigation given the ties of some members of the board – including chairman Gwyn Morgan, a former Tory fundraiser, and Conservative Senator Hugh Segal…The insiders are also calling for a broader probe, involving other employees…Other insiders and former employees are irked that it took an outside authority like Swiss prosecutors to initiate an investigation.”
The Toronto Star has quoted Anthony Scilipoti, Executive VP at Veritas Investment Research, as saying, “In our view, the findings of this report (“Skeletons in the Closet”) support an increased probability that SNC’s future business prospects will be adversely affected by additional revelations of improper acts and/or increased scrutiny over SNC’s business activities.”
RETA has already reported on concerns raised by billionaire investor Stephen Jarislowsky and Canada’s Foreign Affairs Minister John Baird.
For anyone who does not think that the ongoing corruption probe will affect SNC-Lavalin, the Financial Post writes, “As Canadian engineering giant SNC-Lavalin Group Inc. struggles through an unprecedented scandal that has rattled its employees and shaken its reputation, its depressed stock market valuation may make it a ripe takeover target.”
“From a pure financial standpoint running the math, it’s definitely compelling” for a potential buyer, said Trevor Johnson, a National Bank Financial analyst (Financial Post).
Governments around the world that have contracts or potential contracts with SNC-Lavalin are also expressing concerns. Edmonton City Councillor Tony Catarina has said the following about the $300 million NAIT LRT contract Edmonton has with SNC, “At this point, if their circumstances change we have to be concerned as a city of whether they can fulfil their commitment to us under contract,” (Edmonton Sun). 62% of those responding to a Sun poll (as of May 3) voted yes to the question, “Should the City reconsider its contract with SNC-Lavalin Inc.?”
“Newfoundland and Labrador’s Opposition Liberals raised questions Monday about how the corruption scandal embroiling SNC-Lavalin could affect the Muskrat Falls project. SNC-Lavalin has been hired to do key engineering work on the hydro megaproject,” (CBC News).
RETA has already reported on a county near Chicago not wanting SNC-Lavalin to be involved in constructing a new Chicago-area airport, because of the company’s close ties to the Libyan Gadhafi family.
For more information on SNC-Lavalin and AltaLink, see Making Money by Making Friends, this link, and CBC News.