Corporate fraud and bribery charges against SNC-Lavalin, (thorium nuclear company)

SNC-Lavalin faces rare corporate fraud and bribery charges LES PERREAUX, JEFF GRAY AND BERTRAND MAROTTE MONTREAL and TORONTO — The Globe and Mail, Feb. 19 2015, The RCMP have laid rare corporate fraud and bribery charges against SNC-Lavalin Group Inc. after protracted negotiations with prosecutors failed to reach a settlement, threatening the future of an enormous Canadian firm that builds infrastructure around the world.

While former company executives already face criminal charges related to bribing Libyan officials – former vice-president Riadh Ben Aissa has pleaded guilty to Swiss charges – a series of scandals has shown a culture of breaking ethics rules in the company’s executive suite prior to 2012. These are the first charges targeting the company as a whole.

SNC is accused of using at least $47.7-million to bribe Libyan officials. A second count is for fraud of about $130-million related to construction projects in Libya. SNC responded quickly, saying the alleged activities took place between 2001 and 2011 and the people involved have been fired. The company says it has co-operated with authorities for the past three years and intends to plead not guilty.

A source familiar with the investigation said settlement talks between SNC-Lavalin and prosecutors were close to a deal in October.

As part of any deal, the company was expected to face a multimillion-dollar fine. But the possibility that a guilty plea could automatically trigger a 10-year ban on winning Canadian government contracts “complicated everything” and must have been among the factors that scuppered the settlement, the source said.

Long considered soft on anti-corruption enforcement, Canada’s international reputation may benefit from the charges, according to one of the country’s staunchest critics.

“This is a step in advance. Canada is actually gaining ground on its past,” said Mark Pieth, a criminal law professor at the University of Basel in Switzerland and the former chairman of the Organization for Economic Co-operation and Development’s bribery working group.

“Finally. I had waited for action against the company for a long time.”

Business analysts played down any immediate threat to the company, saying charges and an eventual fine of up to $300-million were expected. But chief executive Robert Card was unequivocal when he told The Globe and Mail last fall SNC could be broken up or “cease to exist” if the company were convicted and barred from Canadian government contracts for 10 years. He said even laying charges could be damaging enough to SNC’s reputation to pose a threat…..

Riyaz Dattu, a Toronto lawyer with Osler, Hoskin & Harcourt LLP who advises companies on corruption issues, said the charges for SNC-Lavalin are a dire warning for other Canadian companies that they need to bring in stronger anti-corruption controls and new training for employees to ensure bribes are not being paid around the world.

“The message is coming through loud and clear to corporate Canada,” Mr. Dattu said.

The Libyan allegations are not the only corruption troubles facing SNC. Ethics probes have involved SNC employees who worked on projects in Algeria, Bangladesh and Montreal. Mr. Ben Aissa is at the centre of many of the allegations, including fraud and corruption charges related to building a Montreal hospital……….http://www.theglobeandmail.com/report-on-business/snc-lavalin-faces-rare-corporate-fraud-and-bribery-charges/article23108284/

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