Corruption charges have cost SNC-Lavalin overseas contracts, says CEO

MONTREAL—Criminal charges against SNC-Lavalin Group Inc. prevented the engineering and construction company from winning important foreign contracts last year, CEO Neil Bruce said.

“It was overseas and it was significant,” he said at a news conference following its May 4 annual meeting.

Bruce said the Montreal-based company believes it lost the contracts because two successful competitors availed themselves of deferred prosecution agreements.

He declined to put a value on the contract losses.

Bruce repeated the company’s request that Ottawa put in place a process found in other countries that allows companies to settle corporate corruption cases and avoid being put at a disadvantage when competing against rival firms in other G7 countries.

SNC-Lavalin has pleaded not guilty to one count each of fraud and corruption filed in 2015 by the RCMP against SNC-Lavalin and two of its subsidiaries.

The RCMP alleges SNC-Lavalin paid nearly $47.7 million to public officials in Libya between 2001 and 2011 to influence government decisions.

The Mounties also allege that the company, its construction division and its SNC-Lavalin international subsidiary defrauded various Libyan organizations of about $129.8 million.

The federal Justice Department didn’t immediately respond to questions about the request for deferred prosecution agreements.

SNC-Lavalin also reported that its net profit decreased to $89.7 million or 60 cents per share for three months ended March 31. That compared to $122.1 million or 81 cents per share a year earlier when it received a $51.1-million tax gain from the sale of assets.

Excluding one-time items, adjusted profits were $60.7 million or 40 cents per share, in line with analyst forecasts and up 6.1 per cent from last year.

Revenues decreased 6.5 per cent to $1.85 billion.