SNC settles with World Bank, no bidding for up to 10 years
(Reuters) - SNC-Lavalin Group Inc SNC.TO, the Canadian construction and engineering company at the center of a corruption and ethics scandal, said on Wednesday it agreed to a settlement with the World Bank that excludes it from bidding on bank-sponsored projects for up to 10 years.
The company said it reached a confidential settlement with the World Bank that does not include a financial penalty. However, its SNC-Lavalin Inc unit will be kept from bidding on World Bank-backed projects for a decade, though that can be reduced by two years if SNC meets all the settlement's terms and conditions.
"The company's decision to settle signals our determination as we go forward to set standards for ethics in business conduct and for good governance that are beyond reproach," Robert Card, the company's chief executive, said in a statement.
SNC executives are accused of bribing Bangladeshi officials in relation to a bridge contract that was backed by a $1.2 billion line of credit from the World Bank. The bank canceled the credit line last year after finding what it called "credible evidence" of high level corruption.
SNC has been has been mired in an ethics and corruption scandal over the last year, after it uncovered tens of millions of dollars in mysterious payments. Its former Chief Executive Officer Pierre Duhaime, who resigned in the face of the probe, now faces fraud charges.
The company said that some of its other units would still be eligible to bid on World Bank projects as long as the comply with the terms of the settlement. The subsidiaries that are eligible were not named.
SNC-Lavalin said that World Bank projects account for about one percent of its annual revenue.
The company's shares fell 87 Canadian cents to C$41.63 on Wednesday on the Toronto Stock Exchange.
(Reporting by Scott Haggett; Editing by Bernard Orr)
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