RCMP raids SNC-Lavalin’s Montreal headquarters over actions of former employees

MONTREAL, Que. – RCMP investigators were executing a search warrant Friday at the Montreal headquarters of embattled engineering giant SNC-Lavalin, which has been searching for millions of dollars of mysterious payments.

The global construction and engineering company said the police action relates to an investigation of some former employees.

“The company is co-operating fully with all investigations regarding this or any other matters and intends to respond to all requests from the authorities,” spokeswoman Leslie Quinton said in a news release.

The Montreal-based company said last month that it planned to inform police and other authorities about the results of an internal investigation into $56 million (U.S.) of payments that resulted in the departure of its CEO and two other senior executives.

Chief executive Pierre Duhaime stepped aside after a probe revealed he signed off on payments to undisclosed agents on two large projects, breaching the company’s code of ethics.

SNC-Lavalin has refused to indicate the whereabouts of the projects involved, or rule out if they included construction projects in Canada.

However, the company has said that it didn’t believe the payments in question were related to its operations in Libya. SNC was one of the major Canadian companies doing business in the North African country prior to the fall of Moammar Gadhafi last year.

Duhaime, 57, is slated to receive nearly $5 million as a golden handshake severance package after he was relieved of his duties.

He will remain an SNC employee until June 27 but will not have any responsibilities or perform any policy-making decisions, the Montreal-based company said in a regulatory filing ahead of its May annual meeting.

SNC-Lavalin has said Duhaime co-operated with its internal investigation, but couldn’t provide details of the payments. Investigators believe those details are known by two former senior employees, including one who has since left the country.

Executive vice-president of construction, Riadh Ben Aissa and vice-president of finance Stephane Roy, parted ways with the company after the board said their conduct had recently been questioned. Their departure coincided with the February launch of a board investigation into $35-million in questionable payments.

The company said Aissa, who did not co-operate with the investigation, authorized the signing of agreements for the projects, which were improperly documented.

It said Aissa “is believed to have significant knowledge about most of the investigated transactions, but has not been met despite a request to his counsel.” He is believed to have left Canada, possibly for Tunisia.

SNC added that Roy may also have knowledge, but he has not been interviewed since prior to his dismissal in February.

It’s not the first time that SNC’s offices have been raided by the RCMP.

The World Bank has temporarily suspended its Bangladesh subsidiary from bidding on new projects while it completes an investigation that prompted RCMP raids of Toronto-area offices last year.

The RCMP has said it conducted searches at several locations near Toronto to gather evidence for an ongoing investigation involving employees at the company.

The World Bank signed a deal last April to lend $1.2 billion to Bangladesh to build the bridge over the Padma river, but it said the money won’t be doled out until the investigation has been completed.

SNC-Lavalin has offices across Canada and in more than 40 other countries around the world, and is currently working in some 100 countries.