Former SNC-Lavalin CEO faces new corruption charges

Wed Feb 27, 2013 4:51pm EST
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By Louise Egan and Susan Taylor

OTTAWA (Reuters) - The former chief executive of SNC-Lavalin Group Inc (SNC.TO: Quote), a Canadian construction and engineering company caught in a far-reaching misconduct scandal, faces six new fraud-related charges, police said on Wednesday after issuing a warrant for his arrest.

The province of Quebec's anti-corruption police unit alleges that ex-CEO Pierre Duhaime, who resigned from the Montreal-based company last year, committed fraud and other criminal offenses.

In a statement, the unit provided no details about the charges, but the Globe and Mail newspaper reported they were connected to a contract awarded to SNC in 2010 for the construction of a Montreal hospital.

An arrest warrant was also issued on Wednesday for Riadh Ben Aissa, SNC's former head of construction, for similar corruption charges, as well as for three other men.

The allegations are the latest development in a widening scandal at SNC that stretches from Montreal to Tripoli and led to prior arrests of both Duhaime and Ben Aissa.

"In the cases of Pierre Duhaime and Riadh Ben Aissa, these are new criminal accusations which have been authorized by the bureau for the fight against corruption and embezzlement," said the anti-corruption unit in a statement.

In early 2012, an internal investigation by SNC found that $56 million in funds had gone missing, paid to unknown agents on projects that did not exist. Duhaime quit in March after it came to light that he signed off on the mystery payments.

He was then arrested in November on three fraud charges and later released.   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