French authorities investigating SNC Lavalin over payments to Middle East
Prosecutors believe the firm paid a $13.5 million commission to win a gas plant project in Abu Dhabi.
MONTREAL—French authorities are investigating SNC-Lavalin over allegations that a portion of the $56 million in questionable payments identified by the company in an internal investigation was used to win a project in the United Arab Emirates.
A prosecutor in Reims opened an investigation last summer after an external auditor found “anomalies” in the accounting books of SNC-Lavalin Europe.
A local newspaper, L’Union de Reims, reported that $13.5 million that was supposed to be used for European projects appeared to have instead been paid to someone in the Middle East.
Police raided the SNC-Lavalin Europe headquarters, then in Reims, last November. They believe the $13.5 million was a commission paid to win a gas complex project in Abu Dhabi, according to the newspaper.
SNC-Lavalin couldn’t be immediately reached for comment, but a spokeswoman told Montreal La Presse that the $13.5 million was part of the $56 million in payments to unidentified agents that was disclosed in March 2012 following an internal investigation.
The document led to the departure of several senior executives and a string of events that left the company’s reputation in tatters.
Former CEO Pierre Duhaime and former SNC vice-president Riadh Ben Aissa have been charged with fraud over allegations that $22.5 million of the $56 million was used to win the Montreal super hospital contract. Ben Aissa has been jailed for more than a year in Switzerland on alleged corruption, fraud and money-laundering in North Africa.
The use of the remaining $20 million in payments hasn’t been identified.
SNC-Lavalin’s offices in Algeria were also raided last month. Algerian media said police are investigating an $825-million contract SNC-Lavalin won in 2005 to build the Hadjret Ennous power plant near Algiers.
The RCMP previously raided company offices in Oakville, Ont., related to alleged bribes in Bangladesh, and its headquarters in Montreal at the request of Swiss authorities.
The World Bank barred a SNC-Lavalin subsidiary and affiliates from bidding on its projects for 10 years as a result of allegations stemming from the Bangladesh bridge project.
The embattled Montreal-based company has said it expected police investigations and searches would flow after it handed information to the RCMP in March 2012.