Police raided SNC-Lavalin offices in Algeria, company confirms

MONTREAL – Police in Algeria raided the country headquarters of SNC-Lavalin Group Inc. as the Canadian engineering giant tries to resolve questions about its activity in the North African nation.

Company spokesperson Leslie Quinton confirmed Sunday that Algerian authorities searched SNC’s office in Algiers on May 27 in connection with an ongoing investigation.

“We have been meeting with authorities to try to understand and clarify this situation to their satisfaction,� Ms. Quinton said by email. “We understand and appreciate their concern, given the current Algerian context, and are committed to helping them bring this to a resolution and reacting as required.� She declined to comment on the specifics of the investigation.

Local media reported that police searched SNC’s Algerian base for information linked to a current corruption probe involving public contracts. There were also reports that authorities asked SNC-Lavalin to shut down the headquarters and limit its activity in the country to a small liaison office.

Ms. Quinton denied those reports, saying the company has not been officially informed of any government decision.

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SNC-Lavalin employs more than 1,000 people in Algeria, a presence it has built over four decades. Being banned from work there would represent a blow given the efforts it has made to maintain local operations even as other companies shunned the country at times over security concerns. Algeria battled Islamists during a decade-long civil war in the 1990s that claimed more than 150,000 lives.

Investigators in Switzerland and Italy are probing allegations of bribery involving SNC and other firms in Algeria. At the heart of the probe is the claim that several oil and gas service companies including SNC hired an Algerian consultant named Farid Bedjaoui, who allegedly acted as a conduit to transfer some $200-million in suspicious payments to Algerian leaders to help their firms win contracts with the country’s state-run petroleum company Sonatrach.

SNC has denied it has a direct relationship with Mr. Bedjaoui, saying its own information shows that SNC outsourced certain contracts to companies in which Mr. Bedjaoui was a shareholder but did not deal with him directly.

The company is trying to move forward from an unprecedented 18-month ethics scandal that has left its market value $1.9-billion lower today than when it started and forced out several senior executives. It is widely believed that SNC will face sanction under Canada’s Corruption of Foreign Public Officials Act.

The World Bank has barred SNC and some 100 subsidiaries from bidding on bank development projects over the next 10 years after the company agreed not to contest charges that it conspired to bribe public officials in Bangladesh. Companies including Algeria are now moving to better understand the impact of the bank’s decision.

In March, Algerian daily newspaper El Watan reported that Algerian law enforcement investigators are probing a specific contract that SNC won in 2005, namely the construction of the Hadjret Ennous power plant near Algiers. SNC won the contract with Mr. Bedjaoui’s help, the paper said.

A month later, in an effort to address rumours circulating about it in Algeria, SNC in April took the unusual step of sending an open letter to the country’s media in which it insisted it is cooperating with law enforcement authorities and that anyone who has committed illegal acts should be brought to justice.

“We want to reiterate our long-standing commitment to Algeria,� the company said in the letter, signed by chief executive Robert Card and senior vice-president Charles Chebl. “SNC-Lavalin’s board and management are determined to turn the page on this unfortunate chapter in the 102-year history of this great company, without forgetting the lessons learned.�

SNC’s most recent contract win in Algeria was a $1.2-billion deal in 2009 to design and build a natural gas processing plant in the Sahara desert with Sonatrach. In all, it has won an estimated $6-billion worth of business in the country over the past 10 years.

The revenue has not come without cost. In 2008, SNC lost 10 Algerian employees after a terrorist car bomb exploded during a particularly bloody week of unrest.

Last week, the company announced it would offer an amnesty program to most of its 34,000 employees in order to take its own internal investigation deeper. Under the 3-month program, SNC guarantees it will not make claims to damages or unilaterally fire an employee who comes forward with information. Top executives in the company’s Office of the President, executives in management committee groups, or anyone who profited directly from an ethical violation are not eligible.

Financial Post
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Article source: http://www.canada.com/Police+raided+Lavalin+offices+Algeria+company+confirms/8470111/story.html