MONTREAL - SNC-Lavalin Group Inc. (TSX:SNC) said Wednesday a settlement has been reached with the World Bank Group in an investigation into allegations of bribery involving a bridge contract in Bangladesh.
A number of terms of the settlement were being withheld, but they included a suspension of the right of a subsidiary, SNC-Lavalin Inc. and its controlled affiliates, to be awarded World Bank Group-financed projects for 10 years.
However, the suspension could be lifted after eight years if the terms and conditions of the settlement agreement are complied with fully, SNC said in a news release Wednesday.
No financial penalty was imposed and other SNC-Lavalin Group subsidiaries will be able to bid on such contracts if they meet the terms of the agreement, SNC added.
The company said revenues generated from projects in the affected subsidiaries that are financed by the World Bank and other multilateral development banks have historically represented about one per cent of the its annual revenues.
The RCMP raided a SNC-Lavalin office in Oakville, Ont., in September 2011 at the request of the World Bank, which was investigating a bridge contract that was never awarded in the South Asian country.
The accusations of bribery prompted the World Bank to suspend a US$1.2-billion loan and temporarily barred the SNC-Lavalin subsidiary from bidding on other contracts in the country.
A Bangladesh newspaper has reported that the country's anti-corruption commission was investigating allegations that SNC-Lavalin Inc. offered "huge bribes" to at least six influential Bangladeshi officials, including two former government ministers, to obtain the lucrative bridge contract.
SNC-Lavalin Group said Wednesday that the company launched an internal investigation when the matter was first brought to its attention and "has worked closely with the World Bank throughout the settlement process."
"The company's decision to settle signals our determination as we go forward to set standards for ethics in business conduct and for good governance that are beyond reproach," CEO Robert Card said.
"The company has already taken, and will continue to take, measures to ensure rigorous compliance and control procedures are in place," Card added.
SNC-Lavalin Group is involved in engineering and construction projects around the world.