March 30, 2023

The Queens County Citizen

Complete Canadian News World

SNC-Lavalin World Bank Rehabilitation

SNC-Lavalin World Bank Rehabilitation

After cracking down on it in 2013 in the wake of corruption cases in Bangladesh and Cambodia, SNC-Lavalin dropped the World Bank’s blacklist that decided to withdraw the name of the engineering and construction company two years earlier than planned.

Julian Arsenalt
The Canadian Press

The decision, announced on Tuesday, will help restore the multinational reputation that has been heavily damaged over the past decade due to multiple scandals. It could re-launch the tender and provide financial assistance through the World Bank and other regional institutions, which are expected to deploy US $ 160 billion by the end of June in developing countries.

When it came to cracking down on SNC-Lavalin and its 100 subsidiaries in 2013, the World Bank emphasized the 10-year dismissal as “the exception period so far”. This blacklisting was finally reduced to eight years because of the company’s compliance with the requirements of the international organization and the follow-ups undertaken by its auditors.

Henry Dirker, SNC-Lavalin Chief Compliance Officer, said the eight-year purge had had an impact on the company’s reputation as well as its economy, but did not quantify the risks.

“There’s also one thing that most people don’t care about,” he said in a videoconference interview. Many companies with integrity governance are inspired by the World Bank list (unregistered companies). Therefore, most companies choose not to do business with us because we are on this list. ”

These are allegations of corruption in the 2011 SNC-Lavalin deal to build a World Bank-funded bridge in Bangladesh – prompting the international body to take action. In this case, two former executives of the company and a businessman were also accused of bribing a foreign official in Canada. However, an Ontario judge acquitted them after ruling that the evidence could not be allowed.

READ  Scientific Games Montreal Factory: Your Scratch Cards Remade in Quebec

A World Bank investigation has uncovered irregularities in a transportation and electrification project in Cambodia.

“According to the Office of Independent Consent […] It fulfilled its obligations under the SNC-Lavalin Agreement (entered into 2013) and lifted the sanctions on April 17, ”a World Bank spokesman said in an email.

Limited effects

On the Toronto Stock Exchange floor on Tuesday, just hours after the announcement, the SNC-Lavalin title was down 16 cents, or 0.6%, at .0.07.06.

For Franకోois Dauphin, director general of the Institute on the Administration of Private and Public Organizations (IGOPP), the decision of an international organization is likely to have a positive impact on the organization’s image rather than the organization’s economy. Short-term.

“The company has suffered a lot in recent years,” he explained in a telephone interview. She has recovered her prestige somewhat, but not everywhere. In some parts of the country, it still needs to be restored. ”

In a note sent to his clients, Sabhat Khan of RBC Capital Markets echoed the same sentiment. At the time of listing in 2013, SNC-Lavalin’s earnings from the World Bank and its regional partners represented only 1% of its annual sales. The company had revenue of $ 8 billion in fiscal year 2012.

A huge past

In Canada, in December 2019, SNC-Lavalin was fined $ 280 million and one of its divisions pleaded guilty to fraud for activities in Libya between 2001 and 2011. Instead, the Royal Canadian Mounted Police (RCMP)’s divisions of SNC-Lavalin have suspended investigations against others in connection with the 2015 allegations.

The agreement, which came with a three-year probationary period, protected the company from being suspended from federal government contracts for up to 10 years.

READ  Canadian branch of Silicon Valley Bank controlled by Ottawa

But even SNC-Lavalin can overcome its dirty past once again. In a recent annual report, the company wrote that it “understood” that research would take place in some parts of the world, especially in Algeria.

According to the document, RCMP is continuing to investigate payments in connection with the 2002 agreement for the rehabilitation of the Jacques-Cartier Bridge by a consortium consisting of SNC-Lavalin. In August 2017, the former president and CEO of the Society des Pontes, Federal Mitchell Fournier, was sentenced to five and a half years in prison after pleading guilty to two counts of bribery of more than 2 million. However, he has since been released.