Chief of SNC-Lavalin Steps Down After Report

A newly unsealed police affidavit alleges that unidentified administrators of McGill University Health Centre committed fraud in the awarding of a $1.3-billion contract to SNC-Lavalin Group to build a superhospital in Montreal. The document confirms for the first time that police suspect one or more MUHC managers were involved in the corruption scandal that has ensnared Canada’s largest engineering firm. SNC-Lavalin’s former chief executive, Pierre Duhaime, was arrested last November for fraud and using forged documents in connection with the hospital project.

SNC-Lavalin Group Inc. is demanding that all independent consultants it does business with complete an “ethics exam” by the end of the year or risk losing their contracts with the company. The move has provoked indignation among some of those consultants, one of whom denounced “the absurdity” of the engineering giant unilaterally forcing its will on its business associates to attempt to repair its battered reputation.

Swiss prosecutors have reportedly indicted a former top executive of Canadian engineering and construction giant SNC-Lavalin, alleging he helped launder millions of dollars used to win contracts in Libya and other North African countries. Riadh Ben Aissa, a former vice-president at the Montreal-based company who has been detained since the spring, is now facing charges related to his role in an alleged scheme connected to $139-million in payments made by SNC-Lavalin, Swiss broadcaster RTS and CBC News reported.

MONTREAL – Canadian engineering giant SNC-Lavalin Group Inc. has hired Watergate investigator Michael Hershman to advise the company on anti-corruption issues as it takes steps to strengthen its business practices amid ongoing police investigations and allegations of wrongdoing involving former employees.

MONTREAL — Allegations of impropriety swirling around SNC-Lavalin and Quebec’s construction industry has prompted the Shriners to take greater control of who builds its new Montreal hospital, the philanthropic group said Thursday. The Shriners selected SNC-Lavalin to manage construction of the $127-million hospital that will be built adjacent to a $2.35-billion super-hospital set to open in the summer of 2015.

MONTREAL — The Quebec Court of Appeal has rebuffed the provincial securities regulator, which feared there was a risk of “collusion” if SNC-Lavalin auditors were given details about its investigation into the scandal that has engulfed the engineering giant. In a ruling issued Wednesday, Quebec’s highest court supported the review office of l’Autorite des marches financiers, which allowed an SNC-Lavalin executive under investigation to provide details to the company’s audit committee and external auditors Deloitte & Touche.

Accused of fraud, former SNC-Lavalin Group Inc. chief executive Pierre Duhaime left the company with a retirement payout potentially worth $13.2-million including stock options. And the engineering giant has no way other than suing him to try to get the money back. That’s the view of Luis Navas, an executive compensation specialist with Toronto-based Global Governance Advisors, whose clients include Bank of Montreal.

MONTREAL – Quebec’s special anti-corruption police squad has arrested former SNC-Lavalin Inc. chief executive Pierre Duhaime. Montreal media outlets reported the arrest Wednesday morning. A spokesman for the squad did not immediately return calls. SNC shares fell 1.5% to $40.29 in morning trading as the news spread.