SNC-Lavalin stops payments to ex-CEO arrested for fraud

Thu Dec 13, 2012 11:23am EST
 

(Reuters) - SNC-Lavalin Group Inc (SNC.TO: Quote), Canada's biggest engineering company, said it would suspend payments to its former chief executive, saying his arrest on fraud charges suggested it may not have been aware of all the facts when he resigned.

Pierre Duhaime stepped down in March after an internal investigation found that $56 million in company funds had gone missing, paid to unknown agents on projects that did not exist.

He was arrested on November 28 by Quebec's anti-corruption squad on charges of fraud, conspiracy to commit fraud and use of false documents.

Duhaime's exit package, as laid out in a proxy circular in April, is worth about C$5.0 million ($5.1 million). It includes C$1.9 million in salary, two years' pension credit and about C$55,000 for professional development.

Until the facts are clarified or resolved, payments under the arrangements will be held separately, SNC-Lavalin said on Thursday.

Duhaime could not be reached immediately for comment.

SEVERAL INVESTIGATIONS

Duhaime is not the only former SNC executive who is under investigation. The Quebec anti-corruption squad said in November that SNC's former head of construction, Riadh Ben Aissa, is facing the same charges as Duhaime.

Ben Aissa was also arrested in Switzerland in the spring. According to media reports, Swiss police are investigating $139 million in payments to a Swiss bank account tied to large construction contracts in Libya.   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