SNC-Lavalin ex-CEO arrested in widening scandal

Wed Nov 28, 2012 8:26pm EST
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By Nicole Mordant

(Reuters) - In the latest twist in an ethics scandal at Canada's biggest engineering firm, the former chief executive of SNC-Lavalin Group (SNC.TO: Quote) was arrested on Wednesday on three fraud-related charges, sending the company's stock down 2 percent.

Pierre Duhaime, who resigned from SNC in March, was arrested at his home by the province of Quebec's anti-corruption squad on charges of fraud, conspiracy to commit fraud and use of false documents, said Anne-Frédérick Laurence, a spokeswoman for Unite Permanente Anticorruption Quebec, a provincial police unit.

"He was arrested this morning and he will be able to go with a promise to collaborate," she said by telephone from Montreal, the largest city in the mainly French-speaking province.

Laurence would not comment further on the nature of the charges.

Duhaime's arrest is the latest blow for the 101-year-old company, which is still reeling from an internal investigation's finding earlier this year that $56 million in funds had gone missing, paid to unknown agents on projects that did not exist. Duhaime quit after it came to light that he signed off on the mystery payments.

Duhaime's lawyer, Michel Massicotte, said that as of 5 p.m. EST (2200 GMT), it was his understanding that his client had not yet been released, although he was expected to be released on Wednesday.

Montreal-based SNC, which is one of the world's biggest engineering groups, said it had been informed of Duhaime's arrest but that it was unable to comment further.

"As we have stated repeatedly, SNC-Lavalin has and will continue to cooperate fully with all authorities who request our assistance," the company said in an emailed statement.   Continued...

Pierre Duhaime, former chief executive of SNC-Lavalin Group, leaves Surete du Quebec (SQ) custody after being arrested on fraud charges in Montreal November 28, 2012. REUTERS/Christinne Muschi