Former SNC-Lavalin Exec Accused Of Funneling Cash To Gadhafis

Posted: Updated:
Print Article
SNC LAVALIN LIBYA
An RCMP officer is shown in the lobby of SNC Lavalin in Montreal, Friday, April 13, 2012. This is the second time the RCMP have searched the premises of the engineering giant executing search warrants related to millions of dollars of mysterious payments. THE CANADIAN PRESS IMAGES/Graham Hughes | CP


An angry insider at engineering giant SNC-Lavalin has accused the company’s former head of construction, Riadh Ben Aissa, of secretly funneling money to members of Libya’s Gadhafi family, according to a "poison pen" email obtained by CBC News.

“Since the early 1990s Ben Aissa has organized more than 300 million [dollars in] payments to shell companies acting as intermediaries between SNC-Lavalin and the Libyan government (ie the Gaddafi family),” the anonymous insider wrote in the email, which was sent to the company's executives and board of directors in December.

The message called on them to show “courage and ethics” to fix internal problems within the company, urging them to "move your ass!”

Ben Aissa was forced to resign from SNC-Lavalin two months later in February, along with his VP controller Stéphane Roy, amid company audits which have since found Ben Aissa was involved in $56 million of improper payments to undisclosed agents, according to the company.

On Sunday, CBC/Radio-Canada and Swiss public broadcaster RTS revealed authorities in Switzerland recently arrested Ben Aissa and are detaining him on accusations of fraud, corrupting a public official and money laundering tied to dealings in North Africa. Swiss justice official Jeannette Balmer refused to discuss any other details.

CBC has no proof of the substance of the allegations contained in the "poison pen" email, nor any evidence it relates in any way to the allegations Ben Aissa now faces in Switzerland.

Ben Aissa is also the executive who hired Cyndy Vanier, the Canadian consultant who is sitting in a Mexican jail. She is accused of plotting to smuggle Saadi Gadhafi — who had a long history of directing billions of dollars in construction projects to Ben Aissa – out of Libya last fall.

Vanier maintains Ben Aissa hired her to oversee the chartering of airplanes for SNC-Lavalin, and to advise on an "employee reintegration plan" to be implemented when the Libya conflict subsided.

Ben Aissa's Canadian lawyer Michael Edelson refused to discuss the letter, Vanier’s plight or his client's current status in Switzerland when reached Tuesday by CBC News.

Subsequent company audits

What is clear is that that the December email — amid media reports of Vanier’s arrest — sparked a cascade of internal company audits, revelations of missing millions and three high-profile resignations within the company, including that of Ben Aissa prior to his arrest.

SNC-Lavalin's share price has plummeted over the past year from a high of $59.97 in June to $38.52 at close on May 1, a trend that's prompted a group of shareholders to launch a class-action lawsuit over governance of the company.

The Montreal-based company is one of the largest engineering and construction firms in the world, with about 28,000 employees worldwide and operations in more than 100 countries.

The release of the December email targeting Ben Aissa comes days ahead of what is expected to be an explosive annual SNC-Lavalin shareholders meeting set to take place Thursday in Toronto.

The email claims that payments were made to "front companies," which it describes as "vehicles for payments to the Gaddafi family, they share with Ben Aissa, who became one of their largest asset managers, sharing a significant portion of the costs of SNC-Lavalin paid."

“Meanwhile, Ben Aissa also took tens of millions of dollars in commissions from suppliers for international projects in North Africa, which have become vehicles for most of the graft and corruption," the email continues. "Finally, he created his own companies, which are used for the provision of goods and services to projects and SNC-Lavalin and catch dozens of other millions.”

Email urged action

The anonymous email was sent to SNC-Lavalin’s executives, as well as to board members including chair Gwyn Morgan, Hugh Segal, Pierre Lessard and Claude Mongeau. It was also sent to billionaire investor Stephen Jarislowsky, who is the company’s largest shareholder with 14 per cent of its stock.

“The Office of the President, Vice-President and Board of Directors are all aware of the long association between Kadhafi and Ben Aissa," the email says.

"They have all benefited financially from this association as recipients of bonuses, stock options, dividends, directors' fees etc., during the golden years of juicy profits from Libya. The question is whether the Council and the Office of the President is so afraid of the consequences of correcting this situation they will continue to risk everything.”

The person who wrote the email said they sent it in the hope that the board “will have the courage and ethics to share the truth of this crisis with their families — you know what is right action and moral … move your ass!”

SNC-Lavalin’s board did order an internal review. In February, executive vice-president Riadh Ben Aissa and vice-president controller Stephane Roy resigned. The company said their departure was related to the company’s "code of conduct" — something Ben Aissa has disputed.

The company released the results of its audits in March, saying it had found that Ben Aissa participated in $56 million in improper payments to undisclosed agents, with the secret — albeit unauthorized — green light from then CEO Pierre Duhaime. Duhaime was forced to retire in March.

The company said it would contact the RCMP, then in mid-April the Mounties searched SNC-Lavalin’s Montreal headquarters at the request of Swiss investigators.

SNC-Lavalin spokeswoman Leslie Quinton told CBC News the company did receive "the same anonymous letter," sent last December, and that "its contents were considered in the subsequent internal investigations."

"We do not comment publicly on anonymous allegations," Quinton added.

Around the Web

Former SNC-Lavalin exec arrested in Switzerland: reports

Canada News: Swiss arrest former SNC-Lavalin executive for ...

SNC-Lavalin Group Inc. had a name for Riadh Ben Aissa. He was one of the ...

As Libya crumbled, former SNC executive cashed in options

RCMP searching SNC-Lavalin headquarters

New allegations arise in SNC-Lavalin probe