BUSINESS

SNC-Lavalin vice-president to retire soon after shift from CFO position

07/04/2013 06:08 EDT | Updated 09/03/2013 05:12 EDT
MONTREAL - SNC-Lavalin will try to continue to distance itself from past scandals with the replacement of its former long-time chief financial officer, who was only recently put in charge of the company's lucrative infrastructure and investments unit.

Gilles Laramee, who joined the Montreal-based company in 1986, will retire on Aug. 9. He was replaced as CFO last month by Alain-Pierre Raynaud, a former executive of French nuclear giant Areva.

Laramee, who is in his 50s, was named late last year to take over the new infrastructure and concessions business unit to provide "strategic oversight and more active management of the business to leverage its full value."

Asked Thursday why he was leaving so soon after his promotion, SNC-Lavalin spokeswoman Leslie Quinton described it as a "personal choice."

Despite his shift in positions, Laramee survived earlier this year when new chief executive Robert Card shook up the embattled engineering firm's senior management team and created a new organizational structure as SNC-Lavalin (TSX:SNC) tries to turn the page on bribery and other allegations that have sullied its reputation.

SNC's former CEO and vice-president have been charged with fraud over allegations that $22.5 million was used to win the $1.3 billion Montreal megahospital contract in 2010.

According to an SNC internal investigation, Laramee refused to sign off on payments allegedly ordered by Riadh Ben Aissa, a former vice-president jailed in Switzerland. Former CEO Pierre Duhaime approved the payments, but Laramee never informed SNC's board of directors.

Card thanked Laramee for his "27 years of service and extensive contributions to the company."

At SNC-Lavalin's annual meeting in May, Card outlined his strategy for the future, which included the sale of non-core infrastructure assets and the possibility of reducing its stake in other large investments.

SNC-Lavalin's main concession assets are 407 International and AltaLink, one of Canada's largest power transmission companies. It also has ownership stakes in a series of projects including the new concert hall for the Montreal Symphony Orchestra and the new megahospital it is building in Montreal.

The assets provide financial stability but Card said they are also very attractive to potential partners.

Maxim Sytchev of Dundee Securities said Laramee's departure is not unexpected and is a "natural progression on any turnaround situation."

"When Bob Card came in Oct. 1, there was anticipation that we're going to witness a full turnover in the C-suite and that's exactly what we've seen," he said.

Sytchev said the timing of Laramee's departure has nothing to do with any asset sales.

Smaller assets may be sold, but he said the investment community cares most about Highway 407 and AltaLink.

"It's sort of difficult right now to contemplate anything unless the company settles all the ethical issues and that has a timing of its own," said Sytchev.

On the Toronto Stock Exchange, SNC's shares closed up 30 cents at $44.15 on Thursday.