The Mounties have laid corruption and fraud charges against SNC Lavalin, the Montreal-based construction company embroiled in a Libyan bribery scandal.
The RCMP said Thursday morning the company, its division SNC-Lavalin Construction Inc. and its subsidiary SNC-Lavalin International Inc. have been charged with one count of corruption and one count of fraud as part of the ongoing investigation into its business dealings in Gadhafi’s Libya.
Police allege that the company offered more than $47 million to Libyan officials in hopes they would use their positions to influence decisions on the awarding of contracts between 2001 and 2011.
They also allege that during the same decade, the company committed fraud worth $130 million in its dealings in Libya for paying out bribes to win contracts for the Great Man Made River Project and other infrastructure projects in the country.
“Corruption of foreign officials undermines good governance and sustainable economic development,” said Assistant Commissioner Gilles Michaud, Commanding Officer of the RCMP’s National Division.
“The charges laid today demonstrate how the RCMP continues to support Canada’s international commitments and safeguard its integrity and reputation.”
The RCMP said it will not comment further on the investigation that is now before the courts.
SNC said in a statement that the charges are "without merit and will vigorously defend itself." The company will enter a not guilty plea. The company also assured shareholders that the charges do not affect its right or ability to bid or work on projects.
The charges stem from an investigation first launched in 2011 that has tarnished the company's global reputation. Three former executives, including its ex-CEO, have already been charged and fired over the scandal and the company’s Montreal headquarters were raided.
The company has maintained that the problems were the result of three rogue individuals and are not indicative of the broader corporate culture.
“The charges stem from the same alleged activities of former employees from over three years ago in Libya, which are publicly known, and that the company has cooperated on with authorities since then,” CEO Robert Card said in a statement Thursday.
“Even though SNC-Lavalin has already incurred significant financial damage and losses as a result of actions taken prior to March 2012, we have always been and remain willing to reach a reasonable and fair solution that promotes accountability."
One of the former executives charged in the case, Riadh Ben Aissa, who was an executive vice-president, has already been found guilty in a Swiss criminal court on charges that he used a Swiss bank account to funnel the money to pay millions to Saadi Gadhafi, the former dictator's son, in exchange for engineering contracts worth billions of dollars.. He was extradited to Canada last fall and will face trial this year.
The company’s stock price took a dive in the immediate aftermath of the scandal, but it has continued to win big contracts since news first broke three years ago.
Its shares fell seven per cent after news of the charges Thursday, leading at least one analyst to determine the weakness presents a good time to buy the stock and that the charges are not material to its financial position.
"From a financial standpoint, no amounts are involved as settlement is expected only later," Benoit Poirier an analyst at Desjardins wrote in a note to clients.
"At the end of the day, SNC maintains a solid financial position with no debt and C$1.1 billion in cash."
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