Friday, February 20, 2015

SNC-Lavalin Group Inc. - SNC.t

SNC-Lavalin Group Inc. - SNC.t is one of the leading engineering and construction groups in the world and a major player in the ownership of infrastructure.

From offices in over 40 countries, SNC-Lavalin provides EPC and EPCM services to clients in a variety of industry sectors, including mining & metallurgy, oil & gas, environment & water, infrastructure and clean power.

On February 20, 2015 the media released News

The Financial Post reports in its Friday edition the latest RCMP criminal charges regarding SNC-Lavalin's Libyan business have prompted a downgrade from Standard & Poor's. The Post's Yadullah Hussain writes S&P said it is revising the company's outlook to negative from stable, pointing to concern the charges will have an impact on SNC's competitive position, and on the company's operations. "Although the company's current backlog is robust, in our view, and at $12.5 billion it appears to have been materially unaffected by SNC-Lavalin's legal and regulatory issues, we are still concerned that the company's ability to win new contracts remains exposed to reputation risk," S&P analyst Jamie Koutsoukis said in a note. "The market will treat the information as yet another cloud over the company's head; does it ultimately change the amount of penalties SNC will need to fork out for the transgressions? No," wrote Maxim Sytchev at Dundee Capital Markets. "Our own view is that any amount less than $300 million in penalties would be viewed positively by the market." SNC, however, may see its ability to win new orders crimped by the allegations, especially with new competitors nipping at its heels.


Today, SNC-Lavalin (TSX: SNC) was informed that federal charges have been laid by the Public Prosecution Service of Canada against SNC-Lavalin Group Inc., SNC-Lavalin International Inc. and SNC-Lavalin Construction Inc. Each entity has been charged with one count of fraud under section 380 of the Criminal Code of Canada and one count of corruption under Section 3(1)(b) of the Corruption of Foreign Public Officials Act. SNC-Lavalin firmly considers that the charges are without merit and will vigorously defend itself and plead not guilty in the interest of its current employees, families, partners, clients, investors and other stakeholders.

“The charges stem from the same alleged activities of former employees from over three years ago in Libya, which are publicly known, and that the company has cooperated on with authorities since then,” stated Robert G. Card, President and CEO, SNC-Lavalin Group Inc. “Even though SNC-Lavalin has already incurred significant financial damage and losses as a result of actions taken prior to March 2012, we have always been and remain willing to reach a reasonable and fair solution that promotes accountability, while permitting us to continue to do business and protect the livelihood of our over 40,000 employees, our clients, our investors and our other stakeholders.”

It is important to note that companies in other jurisdictions, such as the United States and United Kingdom, benefit from a different approach that has been effectively used in the public interest to resolve similar matters while balancing accountability and securing the employment, economic and other benefits of businesses.