SNC-Lavalin Drops After Canada Police Lay Fraud Charges
(Bloomberg) -- SNC-Lavalin Group Inc. and two former executives at the engineering firm were charged in Canada with fraud and forgery, sending its shares lower.
The Royal Canadian Mounted Police said two Quebec men had been arrested as part of “a lengthy and comprehensive criminal investigation” that resulted in a slew of criminal charges, including fraud against the government and conspiracy.
SNC shares fell as much as 3.4% in Toronto and closed down 2.3% to C$36.10.
The alleged offenses occurred from 1997 to 2004 in connection with the refurbishment of Montreal’s Jacques Cartier bridge by a consortium SNC was a partner in, the company said in a statement. It said it welcomed the opportunity offered by authorities “to negotiate a remediation agreement to resolve these charges.”
“The company, which is today recognized for its robust integrity program and culture, takes seriously these charges relating to alleged events that took place two decades ago,” SNC said. “The investigation of this matter has been disclosed in the company’s public filings and was facilitated by its own self-reporting.”
Normand Morin, a former vice-president of SNC-Lavalin, and Kamal Francis, a former vice-president at SNC-Lavalin International Inc., were arrested on Sept. 23 and released from custody, the police said.
In early 2019, six months before an election, SNC found itself at the center of the biggest political scandal faced by Prime Minister Justin Trudeau.
Former Attorney General Jody Wilson-Raybould alleged he and his aides had put heavy political pressure on her to help SNC settle fraud and corruption charges related to Libya. Trudeau denied it and got engulfed in a crisis that hurt his party’s popularity and his personal brand. He was nevertheless re-elected in 2019 and again this week.
The saga resurfaced earlier this month when Wilson-Raybould recounted a meeting with Trudeau over SNC, writing: “I knew he wanted me to lie.” Again, Trudeau denied it.
SNC said it saw Thursday’s announcement as another step to put the past behind.
“We have said repeatedly that the past behavior of a select group of former individual employees does not represent the values and ethical standards of SNC-Lavalin today,” SNC Chief Executive Officer Ian Edwards said in the statement. “We have made great strides over the past decade.”
©2021 Bloomberg L.P.