Top shareholder says confident in SNC-Lavalin

Mon Apr 30, 2012 5:44pm EDT
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By Nicole Mordant

(Reuters) - SNC-Lavalin Inc's (SNC.TO: Quote) biggest shareholder said on Monday it has "great confidence" in the Canadian engineering company, a day after news of the arrest of a former senior executive on charges of corruption, fraud and money laundering.

SNC did what it could to investigate allegations of wrong-doing, and its reputation is unlikely to be greatly harmed in the long term, said Len Racioppo, president and director of Jarislowsky Fraser, a Canadian investment group that owns approximately 14.4 percent of SNC.

"Moving forward, is there reputational risk here? Perhaps, but I don't think that's going to hurt the company significantly longer term," Racioppo said in an interview.

"We have great confidence in the company."

Montreal-based SNC, which is one of the world's biggest engineering groups with operations in about 100 countries, said last month that it had uncovered US$56 million in improper payments to unknown agents on projects that did not exist.

Canadian police are investigating this, as well as separately probing SNC over allegations about bribery in Bangladesh related to a bridge project there.

The latest twist in the saga came from Switzerland, where the State Prosecutor's Office confirmed on Monday that Riadh Ben Aissa, a former company executive, had been arrested as part of a criminal investigation that was launched last May.

The arrest is in connection with business transactions in North Africa, Jeanette Balmer, a spokeswoman for the Swiss State Prosecutor's Office said in an email.   Continued...

A Royal Canadian Mounted Police (RCMP) officer looks at a receptionist at the headquarters of SNC Lavalin in Montreal April 13, 2012. REUTERS/Christinne Muschi