SNC-Lavalin Shares Fall as Corruption Scandal Continues
A little more than a week following the issuance of warrants for the arrest of SNC ex-boss Pierre Duhaime and SNC ex-VP Riadh Ben Aissa (Reuters 1), SNC-Lavalin shares fell by as much as 8% after the earnings, and its 2013 outlook fell short of analysts’ expectations (Reuters 2). Reuters reports that profit for the construction and engineering giant fell 33% (excluding SNC-Lavalin Capital) from a year earlier, with earnings per share far below analysts’ expectations.
Duhaime and Ben Aissa have most recently been charged by Quebec’s anti-corruption police squad with: fraud, conspiracy to commit fraud, use of forged documents, fraud towards the government, participating in secret commissions, and laundering proceeds of crime in relation to construction of the McGill University Health Centre (MUHC) in Montreal.
As RETA indicated in an earlier “Latest News” post, some who are seeking to build new infrastructure, such as the Region of Waterloo, are wondering whether they should consider SNC-Lavalin’s bid on a light rail project amidst SNC’s growing Canadian and international corruption scandal (Metroland News Service). Most recently, the Kitchener Taxpayers City Watch Spending Group warned Region of Waterloo politicians about dealing with a company whose former top officials are facing corruption charges (Record).
The Montreal Gazette reports, “An affidavit in support of a search warrant for the MUHC headquarters made public Friday provides a paper trail for $22.5 million police allege the SNC-Lavalin engineering firm paid in kickbacks to former McGill University Health Centre director Arthur Porter and Yanai Elbaz, the MUHC’s former planning director.” Quebec police followed the suspected money trail from Montreal to Tunisia to the Bahamas.
For more information on SNC’s corruption scandal see this link. (SNC is building the Heartland Transmission Project together with AltaLink and EPCOR; and the Western Alberta Transmission Line together with AltaLink. SNC-Lavalin owns 100% of AltaLink.)