By Tamsin McMahon and Chris Sorensen - Friday, December 7, 2012 - 0 Comments
How things went terribly wrong under the watch of one of the most distinguished boards in Canada
Less than a week before its former CEO, Pierre Duhaime, was arrested by Quebec police investigators, SNC-Lavalin announced it had received an award for excellence in corporate governance from the Canadian Institute of Chartered Accountants—the seventh time it won the award in the past decade.
As one of the world’s largest engineering firms, with 32,000 employees and projects ranging from airports to water-treatment plants in more than 100 countries, SNC-Lavalin has cultivated a board of directors that could serve as a who’s who of Canadian business. It includes: EnCana Corp. founding CEO Gwyn Morgan, former York University president Lorna Marsden, Canadian National Railway Co. CEO Claude Mongeau, and, until recently, Conservative Senator Hugh Segal. Among them are three recipients of the Order of Canada. Many of the directors have served on SNC-Lavalin’s board for years.
Yet despite the board’s impeccable credentials, on its watch, senior executives at the firm are now alleged to have misappropriated millions to influence the awarding of big contracts both at home and abroad, and then covered their tracks by earmarking the payments for unrelated projects. The Quebec police have charged Duhaime—who resigned in March—with fraud, reportedly in connection with a contract to build and design a new $1.3-billion “super hospital” in Montreal. Authorities are also looking to charge Riadh Ben Aissa, who led SNC-Lavalin’s construction business from the company’s office in Tunisia. Ben Aissa has been indicted in Switzerland as part of an investigation into a money- laundering scheme, which reportedly involved $139 million worth of payments by SNC-Lavalin. Both he and a company vice-president and financial controller, Stéphane Roy, were fired by SNC-Lavalin earlier this year. Continue…