Impasse Over Corruption Charges Costs SNC $3.7 Billion, CEO Says
(Bloomberg) -- Canada’s failure to reach a negotiated settlement with SNC-Lavalin Group Inc. over past corruption charges has probably cost the company more than C$5 billion ($3.7 billion) in lost revenue and continues to damage its reputation internationally, Chief Executive Officer Neil Bruce said.
“It weakens our position as a business because our competition basically use this mercilessly against us, and have been doing so for the past six years,’’ Bruce said Monday from Montreal in an interview with BNN Bloomberg TV. “We know that we’ve lost out on a number of contracts, probably in excess of C$5 billion, because clients in the end will not take the chance on picking SNC-Lavalin.’’
U.S. and European rivals, which Bruce didn’t name, are “constantly, constantly using this against us, even though as a company we have not been found guilty of anything,’’ the CEO said. “These are still charges.’’
The Public Prosecution Service of Canada, which prosecutes federal crimes including fraud and money laundering, won’t open negotiations for a so-called Remediation Agreement over past corruption charges, SNC-Lavalin said in October. While SNC is appealing the decision, it has had “no feedback at all’’ from prosecutors, Bruce said.
“We are puzzled and really unsure as to why we are not in a position to settle,’’ he said. “What we are frustrated by is the lack of engagement, and the lack of information as to why not.”
SNC is a far different company than the one that became embroiled in a corruption scandal in 2012, having since introduced numerous measures to strengthen ethics and compliance, the CEO said.
“From the period of post-2012, we’re six years past that,’’ Bruce said. “The company has self-remediated in so many different ways. We’ve changed the board, we’ve changed the management. All of the alleged bad actors have all left the business.’’
While Quebec Premier Francois Legault last week called Montreal-based SNC vulnerable to a takeover, Bruce said a sale of the company is unlikely because of its size. SNC has a market capitalization of about C$8.3 billion.
“I think it’s pretty difficult because ultimately we’re a big company,’’ Bruce said. “Plus we’ve got a huge Canadian shareholding, more than 80 percent. Ultimately anybody who looked at this would have to have a plan to solve the issues that we’re having difficulty solving.’’
Bruce also insisted the company is committed to remaining headquartered in Montreal.
“We absolutely want to be based here in Quebec, here in Canada,’’ he said.
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