* Engineering firm caught in widening ethics scandal
* SNC says it may not have been aware of all facts
* Former CEO left with C$5.0 million exit package
* CFO to be replaced, but will remain with SNC
Dec 13 SNC-Lavalin Group Inc, Canada's
biggest engineering company, said it would suspend payments to
its former chief executive, saying his arrest on fraud charges
suggested it may not have been aware of all the facts when he
Pierre Duhaime stepped down in March after an internal
investigation found that $56 million in company funds had gone
missing, paid to unknown agents on projects that did not exist.
He was arrested on Nov. 28 by Quebec's anti-corruption squad
on charges of fraud, conspiracy to commit fraud and use of false
Duhaime's exit package, as laid out in a proxy circular in
April, is worth about C$5.0 million ($5.1 million). It includes
C$1.9 million in salary, two years' pension credit and about
C$55,000 for professional development.
Until the facts are clarified or resolved, payments under
the arrangements will be held separately, SNC-Lavalin said on
Duhaime could not be reached immediately for comment.
Duhaime is not the only former SNC executive who is under
investigation. The Quebec anti-corruption squad said in November
that SNC's former head of construction, Riadh Ben Aissa, is
facing the same charges as Duhaime.
Ben Aissa was also arrested in Switzerland in the spring.
According to media reports, Swiss police are investigating $139
million in payments to a Swiss bank account tied to large
construction contracts in Libya.
Separately, Canadian police are also investigating bribery
allegations against SNC executives in connection with a $1.2
billion bridge project in Bangladesh. The World Bank has
suspended its loan for the development and temporarily banned an
SNC subsidiary from bidding on its contracts in the country.
SNC, one of the world's biggest engineering and construction
firms, also published a full-page letter to its stakeholders in
the Globe and Mail newspaper. The letter outlined new compliance
and ethics policies.
"SNC-Lavalin's board and management are determined to put
this unfortunate chapter in this great company's 101-year
history behind us, all the while without forgetting the lessons
learned," it said.
The company said it is cooperating with authorities and
encouraged its employees to do the same. It also said some board
members had decided not to stand for re-election.
SNC-Lavalin also said it had launched a search for a new
chief financial officer. Once a replacement is in place, the
incumbent, Gilles Laramée, will become executive vice president
for infrastructure, concessions and investment, a new role.
Shares of SNC were little changed on Thursday morning,
rising 2 Canadian cents to C$41.26 on the Toronto Stock