AltaLink’s Parent Company Financial Woes Continue

International Construction recently reports, “A Canadian judge has approved a class action lawsuit from shareholders against SNC Lavalin that brings the total damages sought over the contractor’s suspect payments in Libya to CA$ 1 billion (US$ 1 billion)…It comes after a separate group of shareholders filed a similar collective lawsuit in Quebec, seeking CA$ 250 million (US$ 252 million) in damages after the value of their investment in the contractor fell following revelations about the mystery payments.”

At the same time, according to bdnews24, the Bangladesh Anti-Corruption Commission is preparing to come to Canada to continue its probe into alleged corruption in the Bangladesh Padma Bridge Project which involves SNC-Lavalin. The probe followed the World Bank’s suspension of its contribution toward the $2.9 billion project after the RCMP “initiated (a) graft allegation probe against SNC Lavalin Group, which had been chosen for the project supervision.”

Last week, it was discovered that Quebec’s anti-corruption squad is investigating SNC-Lavalin and a U.K.-based firm over the manner in which they were awarded a very lucrative contract to construct the McGill University Health Centre (MUHC). The Montreal Gazette reads, “But two years after construction began on the site of the former Glen Yards, investigators have detected something fishy in the way the $1.3 billion contract was awarded that could shake the MUHC’s very foundation. At 8 a.m. Tuesday, a dozen investigators from the province’s anti-corruption squad, known as the UPAC, descended on the MUHC’s administration offices on Guy St., armed with search warrants and asking questions of potential ‘witnesses’. UPAC spokesperson Anne-Frederick Laurence would say nothing more, only that the raid was part of a major investigation. But three hours later, the MUHC narrowed down the locus of the alleged wrongdoing to the awarding of the Glen site public-private partnership.”

Diablogue reports, “SNC Lavalin is involved in P3 (public-private partnership) projects across Canada, including the new North Bay hospital here in Ontario.”

The ongoing international and Canadian corruption probes into alleged fraud, money laundering and bribery by SNC-Lavalin, and multiple lawsuits against SNC-Lavalin by investors, certainly have tarnished SNC’s reputation. The Canadian Press reads, “SNC-Lavalin’s weak market value may prompt an activist investor to push the engineering giant’s incoming chief executive to sell all or part of its lucrative concession businesses, an analyst said Tuesday. Maxim Sytchev of Alta Corp Capital suggests SNC-Lavalin could end up facing the kind of investor-led campaign that resulted in a new chief executive and new directors at Canadian Pacific Railways (TSX:CP)…Consequently, Sytchev said he thinks activist investors will push for a full or partial spinoff of SNC’s concession assets, which include its stake in the Highway 407 toll road and AltaLink transmission lines business in Alberta.”

(SNC-Lavalin currently owns 100% of AltaLink and is constructing most of AltaLink’s electricity infrastructure in Alberta.)

~ by RETA on September 26, 2012.