Montreal-based Dessau Inc. announced Wednesday the resignation of Jean-Pierre Sauriol as CEO and president.
The move comes after his brother Rosaire, a fellow company executive, testified at Quebec's corruption inquiry about his participation in collusion and illegal political financing schemes.
Rosaire Sauriol told the Charbonneau Commission that his company donated $2 million through false-billing schemes alone, at the municipal and provincial level, between 2005 and 2010.
The benefits of being close to certain local politicians were clear. One chart produced at the inquiry showed how Dessau's contracts suddenly dried up, and other companies' skyrocketed, when there was a change in government in a municipality near Montreal.
He was asked whether he used that same practice to contribute to federal parties and he responded: "Yes."
In a departure letter to employees, Jean-Pierre Sauriol said it had become clear that if he stayed on board, the company might no longer be eligible to win public contracts.
The Quebec government has tasked the province's stock-market regulator with issuing certificates to companies eligible to obtain contracts worth more than $40 million.
Sauriol says he decided to leave after speaking with the stock-market authority about conditions the company would have to meet in order to gain that certificate.
"I have made this decision in what I believe to be in the best interest of Dessau and its 5,000 employees", Sauriol said in a statement released by the company.
"In light of the exchanges we had with the AMF, it became evident to me that Dessau would not obtain this certification if I maintained the leadership of the company.
''I am therefore leaving the company to put in the best standing possible to obtain this certification, which is crucial for the continuation of its activities and further development."
Sauriol's departure is only the latest in a series of changes in the industry, which has been rocked by corruption scandals.
The country's largest engineering firm, SNC-Lavalin, has also lost its former president, Pierre Duhaime, who now faces several criminal charges.
Sauriol will be replaced by Marc Verreault on an interim basis. Meanwhile, Sauriol, who is the company's biggest shareholder, will see his shares bought back by the company.