The SNC-Lavalin legal saga returned to the spotlight Thursday after the RCMP announced that it had indicted two former executives and the engineering company itself for allegedly paying bribes to obtain a contract to repair a bridge in Montreal.
Former SNC-Lavalin Vice President Normand Morin and former SNC-Lavalin International Inc. Vice President Kamal Francis, along with SNC-Lavalin and its subsidiary, have been charged with forgery, conspiracy to commit forgery, fraud and conspiracy to commit fraud. , fraud against the government and conspiracy to commit fraud against the government.
The two former executives have been released from custody and are due to appear in a Montreal court on September 27 along with representatives from SNC-Lavalin and SNC-Lavalin International.
The Director of Criminal and Criminal Proceedings (DPCP) agreed to send an invitation to negotiate a reparation agreement with SNC-Lavalin and SNC-Lavalin International Inc. The invitation went out on Thursday. None of the executives is eligible for such an offer.
Such an agreement, a so-called deferred prosecution agreement, would allow SNC-Lavalin to continue doing business with the governments of Quebec, Canada and abroad.
“It also reduces negative consequences on organizations’ employees, retirees, customers and shareholders,” the DPCP said in a statement.
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SNC-Lavalin said it welcomes the opportunity to negotiate an agreement to resolve these charges that promotes accountability while allowing the company to continue doing business and protecting the livelihoods of employees, customers, investors and other stakeholders. .
“I want to emphasize that these charges stem from events that took place nearly 20 years ago, involving former employees who left the company years ago and no longer have any stake in our organization,” stated CEO Ian Edwards.
He said the company has made great strides over the past decade and today operates to the highest ethical standards.
“We see this as one more step to put the past behind us and allow the company to focus on the future.”
The RCMP said the charges are the result of a complex investigation called Project Agrafe (“Staple”) that began in 2013. It said the investigation was conducted by the force’s Sensitive and International Investigations division, which has a mandate to investigate. criminal activity. that poses a threat to Canadian government institutions, public officials, the integrity of the Crown, or endangers the political, economic and social integrity of Canada.
“I want to emphasize that these charges stem from events that took place nearly 20 years ago, involving former employees who left the company years ago and no longer have any stake in our organization,” stated CEO Ian Edwards. #SNCLavalin
Once the investigation was completed, the RCMP said it passed its evidence to the Quebec Director of Criminal and Criminal Processing to proceed with formalizing the charges and arrest warrants.
The charges date back to events that took place between 1997 and 2004. Michel Fournier, former president and CEO of Federal Bridge Corp., admitted receiving $ 2.23 million in bribes from SNC-Lavalin in connection with the repair of the Jacques-Cartier Bridge for $ 128 million. project through Swiss bank accounts. Fournier, of Victoria, BC, was sentenced to five and a half years in prison in 2017 and has since received full parole.
After retiring in 2004, Fournier created an offshore shell company in the Virgin Islands to bring the bribery money to Canada, according to court documents. The government was only able to seize $ 775,000 of the bribes because Fournier lost a significant amount of money in the stock market.
SNC-Lavalin was previously charged with bribery and fraud in connection with her previous work in Libya, which was at the center of the 2019 high-profile battle between Prime Minister Justin Trudeau and then-Attorney General Jody Wilson-Raybould.
In December 2019, the company reached a settlement in which its construction division pleaded guilty to a single count of fraud, accompanied by a $ 280 million fine, while other charges related to acts committed in Libya were dropped. between 2001 and 2011. The company retained the right to bid for federal government contracts.
SNC-Lavalin was an issue during the 2019 federal election and it resurfaced in this year’s election after Wilson-Raybould wrote a book addressing the company’s criminal prosecution and her testimony that top party leaders her they lobbied to stop the case for political reasons. reasons.
Trudeau said during the recent campaign that the matter had been thoroughly discussed in parliamentary committee hearings, newspaper articles and other testimony before the last federal election. He said the RCMP had never contacted him regarding the SNC matter.
The Liberals won another minority government on Monday.
Industry analysts downplayed the significance of the latest charges and the potential penalty for SNC-Lavalin.
Canaccord Genuity’s Yuri Lynk said the development does not diminish its “bullish stance on SNC in the slightest.”
He said investors should not be caught off guard because alleged wrongdoing around the company’s stake in the bridge has been in the news for years and SNC has warned that the possible charges are a risk.
Lynk added in a report that the potential financial penalty should not be significant given that the magnitude of the gains was small and SNC lost money on the project. The previous fine of $ 280 million payable over five years was $ 127 million in bribes, compared to $ 2.23 million in bribes in this case.
“Based on this, we estimate that a fine related to the Jacques Cartier Bridge would be in the range of tens of millions of dollars,” he wrote, noting that SNC has more than $ 660 million in cash.
“We see this as a bump in the road leading to CNS recovery.”
National Bank Financial analyst Maxim Sytchev said he expects a faster resolution of these charges because SNC-Lavalin would want to quickly sit down with the federal government, while last time he was not invited to negotiate a deal.
“Given the long-term nature of the contract and its small size, we believe that any charge would be commensurate with the infringement,” he wrote in a note to clients.
This Canadian Press report was first published on September 23, 2021.
Reference-www.nationalobserver.com