{"id":216594,"date":"2019-05-29T20:36:30","date_gmt":"2019-05-30T00:36:30","guid":{"rendered":"https:\/\/canadianinquirer.net\/v1\/?p=216594"},"modified":"2019-05-29T20:36:30","modified_gmt":"2019-05-30T00:36:30","slug":"judge-rules-snc-lavalin-headed-to-trial-on-charges-of-fraud-corruption","status":"publish","type":"post","link":"https:\/\/canadianinquirer.net\/v1\/2019\/05\/29\/judge-rules-snc-lavalin-headed-to-trial-on-charges-of-fraud-corruption\/","title":{"rendered":"Judge rules SNC-Lavalin headed to trial on charges of fraud, corruption"},"content":{"rendered":"
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Over the past four months, SNC-Lavalin has been at the centre\u00a0of\u00a0a political controversy following accusations from former attorney general Jody Wilson-Raybould that top government officials pressured her to overrule federal prosecutors, who had opted not to negotiate a deferred prosecution agreement with the company. (Marc Bruxelle \/ Shutterstock.com)<\/figcaption><\/figure>\n

MONTREAL \u2014 A Quebec judge has ruled there is enough evidence to send SNC-Lavalin Group Inc. to trial on charges\u00a0of\u00a0fraud and corruption, surprising few and prompting a further tumble in the beleaguered firm’s share price.<\/p>\n

\u201cGiven the threshold to be met by the prosecution at the stage\u00a0of\u00a0the preliminary inquiry, this outcome was expected,\u201d said SNC-Lavalin chief executive Neil Bruce in a statement.<\/p>\n

The company has previously pleaded not guilty and Bruce said that \u201cwe will vigorously defend ourselves to get the right outcome and be acquitted.\u201d<\/p>\n

The Montreal-based engineering and construction giant is accused\u00a0of\u00a0paying $47.7 million in bribes to public officials in Libya between 2001 and 2011. The company, its construction division and a subsidiary also face one charge each\u00a0of\u00a0fraud and corruption for allegedly defrauding various Libyan organizations\u00a0of\u00a0$129.8 million.<\/p>\n

Judge Claude Leblond’s decision, which is subject to a publication ban, is the latest step in criminal proceedings that began last fall after SNC-Lavalin failed to secure a deferred prosecution agreement, a kind\u00a0of\u00a0plea deal that would have seen the firm agree to pay a fine rather than face prosecution.<\/p>\n

Over the past four months, SNC-Lavalin has been at the centre\u00a0of\u00a0a political controversy following accusations from former attorney general Jody Wilson-Raybould that top government officials pressured her to overrule federal prosecutors, who had opted not to negotiate a deferred prosecution agreement with the company.<\/p>\n

\u201cThe director\u00a0of\u00a0public prosecution has made a decision in that regard,\u201d said prosecutor Richard Roy, asked by reporters whether SNC-Lavalin could still secure an agreement and sidestep a trial.<\/p>\n

Despite the high profile afforded to the case, \u201cSNC-Lavalin will have a fair trial,\u201d he added.<\/p>\n

Prime Minister Justin Trudeau has argued that a criminal trial could trigger the company’s exit to the United States and the loss\u00a0of\u00a0thousands\u00a0of\u00a0jobs, a sentiment that was supported by an internal SNC-Lavalin document obtained by The Canadian Press.<\/p>\n

\u201cWe respect the independence\u00a0of\u00a0our judiciary and we’re not going to comment on an ongoing court case, but as I’ve said many times, we’re always going to fight for Canadian jobs in ways that uphold the rules,\u201d Trudeau told reporters in Ottawa Wednesday.<\/p>\n

SNC-Lavalin warned federal prosecutors last fall about a possible plan to split the company in two, move its offices to the U.S. and chop its Canadian workforce to 3,500 from 8,700 before eventually shuttering its domestic operations if it didn’t get a deal to avoid criminal prosecution.<\/p>\n

Experts viewed the ruling as expected, though that didn’t stop SNC shares from falling more than three per cent Wednesday to close at $24.17, a 14-year low capping off a month that opened with disappointing earnings results. The company’s market valuation has dropped by $1.59 billion, or 27 per cent, over the past 30 days to $4.25 billion. Shares are trading at roughly half their October prices.<\/p>\n

A conviction could lead to a ban on federal bidding for up to 10 years. It could also prompt a ban on bidding for projects backed by the World\u00a0Bank, \u201cwhich is not a big percentage\u00a0of\u00a0what they do,\u201d said Karl Moore, an associate professor at McGill University’s business school.<\/p>\n

He said a potential conviction would allow competitors to \u201cmake hay\u201d\u00a0of\u00a0the company’s situation. \u201cThey would make sure that their potential clients and current clients around the world are aware\u00a0of\u00a0it, and go, ‘Even their own government doesn’t trust them,\u201d’ Moore said, echoing concerns from the CEO.<\/p>\n

\u201cIf the company is convicted, you can’t invoke the defence that this was a bunch\u00a0of\u00a0rogue employees,\u201d added Ian Lee, an associate professor at Carleton University’s business school.<\/p>\n

Nearly one-third\u00a0of\u00a0SNC-Lavalin’s $9.3 billion in revenues in 2017 came from\u00a0Canada, down from roughly 60 per cent\u00a0of\u00a0revenue in 2014. Analysts estimate that up to one-half\u00a0of\u00a0home-turf revenues stem from federal contracts.<\/p>\n

Attorney general David Lametti, who declined to comment, could technically extend an offer for a deferred prosecution agreement up until a guilty finding is handed down.<\/p>\n

\u201cIn the meantime, SNC-Lavalin continues to remain unrestricted in bidding and winning Canadian government funded contracts,\u201d said analyst Derek Spronck\u00a0of\u00a0RBC Dominion Securities in a note to investors.<\/p>\n

In a wide-ranging interview Wednesday, Wilson-Raybould said SNC-Lavalin’s trial \u201cwill proceed in the way that it’s supposed to proceed.\u201d<\/p>\n

\u201cI’m very comfortable and confident with the approach that I took as the attorney general with respect to SNC and with respect to my role generally throughout the three and a bit years that I was in that position,\u201d said the former attorney general.<\/p>\n

The company is due back in court in Montreal on June 7 to choose a trial by jury or by judge alone. Prior to that, it can opt to apply within 30 days to the Superior Court\u00a0of\u00a0Quebec to have Wednesday’s lower court decision quashed.<\/p>\n

\u201cWe are evaluating whether errors at law could justify seeking a judicial review\u00a0of\u00a0the decision,\u201d the company said in an email.<\/p>\n

Companies in this story: (TSX:SNC)<\/p>\n

– With files from Kristy Kirkup<\/p>\n","protected":false},"excerpt":{"rendered":"

MONTREAL \u2014 A Quebec judge has ruled there is enough evidence to send SNC-Lavalin Group Inc. to trial on charges\u00a0of\u00a0fraud …<\/p>\n","protected":false},"author":44,"featured_media":212553,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18,16],"tags":[],"class_list":["post-216594","post","type-post","status-publish","format-standard","has-post-thumbnail","category-news-ca","category-news","mauthors-christopher-reynolds","mauthors-the-canadian-press"],"_links":{"self":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/216594","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/comments?post=216594"}],"version-history":[{"count":1,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/216594\/revisions"}],"predecessor-version":[{"id":216595,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/216594\/revisions\/216595"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/media\/212553"}],"wp:attachment":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/media?parent=216594"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/categories?post=216594"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/tags?post=216594"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}