Class Action Suit Against AltaLink’s Parent Company

A class action lawsuit has been filed against AltaLink’s parent company, Montreal-based engineering giant SNC-Lavalin (see Globe and Mail article and London Free Press article). The suit accuses SNC-Lavalin of misleading investors and engaging in illegal activities in Libya.

More specifically, the action alleges that SNC-Lavalin “made statements that were materially false and misleading in regard to SNC-Lavalin’s code of conduct, legal compliance, and internal controls.” As well, “SNC and certain members of its senior management team were engaged in unlawful activities in Libya…contrary to the defendants’…statements.”

SNC-Lavalin lost 20% of its stock market value in one day this week after it announced it would fall $80 million short of its 2011 net income targets.

A Bloomberg Businessweek editorial reads, “Was SNC’s admission that 2011 net income might be 18% lower than forecast such a shock to the system? The bigger worry may be that the ongoing trickle of bizarre news points to a deeper moral corrosion that extends beyond the firm’s dealings in North Africa.” The editorial concludes, “But investors have enough information to wonder how far the company is willing to go to drum up business with dubious regimes.”

Meanwhile, Veritas Investment Research says the size and complexity of the investigation into SNC’s questionable $35 million payments will impact the company’s performance.

For more on SNC-Lavalin, AltaLink and questionable ties, see this link.

~ by RETA on March 3, 2012.

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