SNC-Lavalin Faces $1.5 B Lawsuit from Investors
Rochon Genova LLP, a Toronto law firm, announced yesterday a global class-action lawsuit against SNC-Lavalin Group Inc, the major engineering and construction firm that has been scrutinized for its alleged business dealings with Libya's Gaddafi regime.
The lawsuit is on behalf of the investors of SNC-Lavalin and alleges that SNC-Lavalin committed securities violations by making unlawful payments to the Gaddafi regime to secure contracts in Libya and misrepresented its financial filings and corporate governance practices to investors. The allegations are not yet proven.
The suit seeks $1.5 billion in damages due to the company’s shares dropping 20 per cent after SNC revealed an internal investigation into $35 million of undocumented payments that is rumoured to have gone to the Gaddafi regime.
That amount was found to be too small as the investigation found the company had made $56 million of improper payments to foreign agents. The payments had been authorized by the company's former CEO Pierre Duhaime.
According to the press release, the lawsuit has been brought on behalf of all SNC-Lavalin investors, excluding residents of Quebec, who purchased securities of SNC-Lavalin between February 1, 2007 and February 28, 2012 or who purchased debentures of the company through the company's June 2009 prospectus offering, according to the press release.
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Currently, the lawsuit is not certified and waiting on a judge to decide if the case is worthy of a trial.
Meanwhile, business is going on as usual at SNC-Lavalin, with its entire board of directors being re-elected last week at the annual general meeting.
When asked for comment by CBC News, SNC-Lavalin spokesperson Leslie Quinton said:
We plan to vigorously defend ourselves, since we think we have always published information appropriately and accurately, following regulatory requirements and best practices regarding timely corporate disclosure.