Canadian Manufacturing

SNC-Lavalin writes letter in bid to rally public support over criminal charges

The Canadian Press

Canadian Manufacturing
Operations Regulation Risk & Compliance Infrastructure Public Sector

The Montreal-based engineering and construction firm took out advertisements in four of Canada's most influential newspapers on Friday

MONTREAL—SNC-Lavalin is trying to rally public support as it prepares to endure a lengthy criminal trial after federal prosecutors refused to negotiate a compensation agreement.

The Montreal-based engineering and construction firm took out advertisements in four of Canada’s most influential newspapers on Friday in the form of a letter from its chief executive to Canadians.

In it, Neil Bruce apologized for wrongdoing prior to 2012 that has tarnished the company’s reputation and said it has made “fundamental changes” in its culture and governance.

“The management team at SNC-Lavalin is entirely new, and I apologize to all for the shortcomings during that period,” he wrote.


“In the years since, we have worked tirelessly to achieve excellence in governance and integrity because we want to regain the confidence of all our stakeholders and employees, and mostly that of all Canadians.”

SNC and two of its subsidiaries were charged in February 2015 with paying nearly $48 million to public officials in Libya between 2001 and 2011 to influence government decisions.

Related: SNC Lavalin settles shareholder class actions in Ontario and Quebec, to pay $88M

The RCMP has also charged the company, its construction division and a subsidiary with one charge each of fraud and corruption for allegedly defrauding various Libyan organizations of roughly $130 million.

Bruce said the newly passed federal remediation agreement regime—which generally imposes a fine in exchange for abandoning court proceedings—is designed to protect a company’s employees, customers, pensioners and other innocent stakeholders who did nothing wrong, while also holding those responsible accountable for wrongdoing.

Related: Federal budget bill quietly proposes tool to ease penalties for corporate crime

“While we had hoped that this new law would permit us to put this long journey behind us, we remain open and committed to negotiating such an agreement in the interest of our 52,000 employees,” he added.

Bruce has said that the decision by the Public Prosecution Service of Canada will likely result in three or four more years of court battles. The case resumes on Oct. 29.

The letter attempts to present national ramifications for SNC-Lavalin’s legal situation.

“Any Canadian firm trying to start a settlement discussion in similar circumstances could be in such a situation,” he said. “It is not just about the 10,000 employees across Canada that through no fault of their own left our firm since 2012 due to the uncertainty, while our global employee base has doubled in size. This debate is about what is right for this country.”

News of the prosecutor’s unwillingness to approve an agreement sent SNC-Lavalin’s shares to close last week under $45 for the first time since 2016.

The shares have since increased to $47.87 in Friday trading on the Toronto Stock Exchange, but the firm could be exposed to a takeover or choose to sell some of its activities, some analysts have warned.

Longer term, a conviction could ban the company from doing work for the federal government for five to 10 years, forcing the layoff of domestic workers.

After the charges were filed, the company asked a team to examine various options to generate shareholder value, wrote Benoit Poirier of Desjardins Capital Markets.

“SNC re-appointed this team last week and retained the services of external stakeholders to evaluate a ‘Plan B’.”

For now, the multinational refuses to comment on the various scenarios presented by analysts, but said that all options are on the table.


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