Canadian Manufacturing

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

The engineering firm's CEO Neil Bruce wants Ottawa to enact "deferred prosecution" policies so these sorts of charges don't impact bids for contracts

May 5, 2017  by Julien Arsenault, The Canadian Press

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.