SNC-Lavalin says it is investigating $35 million in payments that were improperly made and recorded.

The payments were made in the fourth quarter of 2011 and "were documented to construction projects to which they did not relate," the company said Feb. 28.

"The company is working with its external auditors and legal advisors to resolve all issues relating to the investigation," SNC-Lavalin said.

The company also said that it has recorded greater-than-expected losses on its Libyan projects, which were stopped by the Libyan civil war, and that the firm's overall financial performance for 2011 was below the company's forecast.

SNC-Lavalin will record a loss of $23 million from a revised position of its net financial exposure on the Libyan projects. The company's previously forecast net income for 2011 would be $80 million, or 18%, below the forecast level.

On Feb. 9th, the Montreal-based company announced the dismissal of two senior construction executives for reasons attributed only to their "conduct." One of the executives, Riadh Ben Aissa, executive vice president of construction and infrastructure, released a statement disputing SNC-Lavalin's account of his departure.

The company had hired a consultant, Cynthia Vanier, to reassess its Libyan projects. Mexican police arrested Vanier and have been holding her in jail since January in connection with an alleged plot to smuggle the son of Muammar el Qaddafi into Mexico.