SNC-Lavalin Begins Investigation into Mysterious Payments of $35 Million

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.

Deputy Editor Richard Korman helps run ENR's business and legal news and investigations, selects ENR's commentary and oversees editorial content on ENR.com. In 2023 the American Society of Business Publication Editors awarded Richard the Stephen Barr Award, the highest honor for a single feature story or investigation, for his story on the aftermath of a terrible auto crash in Kentucky in 2019, and in 2015 the American Business Media awarded him the Timothy White Award for investigations of surety fraud and workplace bullying. A member of Investigative Reporters and Editors, Richard has been a fellow on drone safety with the McGraw Center for Business Journalism at the Craig Newmark Graduate School of Journalism at CUNY. Richard's freelance writing has appeared in the Seattle Times, the New York Times, Business Week and the websites of The Atlantic and Salon.com. He admires construction projects that finish on time and budget, compensate all team members fairly and record zero fatalities or serious injuries.

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