The stock of AltaLink’s parent company, SNC-Lavalin, has lost about 30% in the past 3 months (Reuters) and nearly 40% over the past year (Globe and Mail) due to a number of corruption investigations, lawsuits, questionable practices of the construction giant around the world, SNC ban by the World Bank in bidding on any World Bank projects, and RCMP raids of its Montreal and Toronto-area offices. Standard & Poor recently revised its outlook on SNC-Lavalin to negative, down from stable, based on these and other events (Wall Street Journal). S & P said in a statement their outlook revision “reflects our concerns” about SNC-Lavalin’s competitive position.
SNC-Lavalin has close ties to the tyrannous Moammar Gadhafi family, involving the construction of many infrastructure projects in Libya, one of which was a prison that was expected to house 4,000 opponents of the Gadhafi regime. Recent revelations (Globe and Mail) indicate an SNC executive’s sister was hired to design the Gadhafi prison, dubbed the “Judicial City” by the Gadhafi regime. Ramia Benaissa Architects, the firm owned by SNC Executive VP Riadh Ben Aissa’s sister, was hired by SNC to not only design the $275 million prison, but to also rehabilitate lakes in the Libyan city of Benghazi.
An investigation of Riadh Ben Aissa has accused him of making $56 million in improper payments that cannot be traced. This has triggered an RCMP probe and a class-action lawsuit by SNC shareholders.
Additional conflict of interest links between the Ben Aissa family and SNC include Mr. Ben Aissa’s mother reported of selling computers and printers to SNC’s Tunisian subsidiary and SNC renting office space in Tunis from a Ben Aissa brother-in-law. The Globe and Mail writes, “Some SNC-Lavalin employees who worked closely with Mr. Ben Aissa, who was born in Tunisia, said they believed the company turned a blind eye to these relationships because nepotism was considered culturally acceptable in that region of the world. That explanation should not placate shareholders, said Chris MacDonald, an expert in business ethics and a visiting professor at the Ted Rogers School of Management at Ryerson University.”
Mr. Ben Aissa’s questionable business ethics have repeatedly been highlighted by the media, including this recent Globe and Mail quote, “As NATO bombs rained down on Libya last year in a bid to oust dictator Moammar Gadhafi, the man (Riadh Ben Aissa) in charge of SNC-Lavalin Group Inc. SNC-T’s operations in the country made time to turn a profit.” During this period, Beb Aissa is reported to have exercised numerous SNC stock options for significant profits, according to insider trading records. According to media reports, it is not clear whether SNC has fired Ben Aissa or he resigned.
Media reports indicate that SNC also forced out CEO Pierre Duhaime last month, alleging that he played a role in the $56 million worth of payments that cannot be traced.
There is more. A recent Reuters article reads, “A Tunisian businessman said he was shut out of SNC’s biggest Tunisian construction project because he refused to pay a bribe to one of the Montreal-based company’s top North African executives, according to a newspaper report.” The businessman is reported to be suing SNC over the matter.
AltaLink and SNC-Lavalin are building the controversial Heartland Transmission Project together with EPCOR, and AltaLink and SNC will be building the Western Alberta Transmission Line. SNC-Lavalin has many other construction contracts in Alberta.
For more information on the business dealings of SNC-Lavalin around the world, see this link, and for information on the close ties between SNC-Lavalin/AltaLink and the Alberta PC Party, see Making Money by Making Friends.