Suspect payments cause SNC Lavalin loss
29 February 2012
Canadian contractor SNC Lavalin is investigating irregular payments made in the fourth quarter that it warned would likely drag the company to a full-year loss for 2011.
It revised its previous 2011 forecast down by CA$ 80 million (US$ 81 million) to a loss of CA$ 23 million (US$ 23.2 million) after uncovering expenses of CA$ 35 million (US$35.5 million) from unexplained payments made during the last three months of the year.
In addition, SNC Lavalin said the impact of its financial exposure to its stalled Libyan projects and unfavourable cost reforecasts on other projects in its infrastructure and environment, and chemicals and petroleum divisions would also affect the full-year result.
SNC Lavalin said it had started an investigation into the fourth quarter payments, which it said were documented to construction projects to which they did not relate and, consequently, had to be recorded as expenses in the quarter.
"The company is working with its external auditors and legal advisors to resolve all issues relating to the investigation to permit the auditors to deliver their audit report on a timely basis," SNC Lavalin said.
The news comes after SNC Lavalin vice president Riadh Ben Aïssa, who oversaw its operations in Libya, and vice president controller Stéphane Roy left the company in February.
"Questions regarding the conduct of SNC Lavalin employees have recently been the focus of public attention. SNC Lavalin reiterates that all employees must comply with our code of ethics and business conduct," the company said.
News reports have linked the executives to an alleged plot to smuggle Saadi Gaddafi, a son of the former Libyan dictator Moammar Gaddafi, into Mexico in the wake of the uprising in Libya last year.
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