UPDATE 2-SNC-Lavalin stops payments to ex-CEO arrested for fraud

Thu Dec 13, 2012 11:22am EST
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* Engineering firm caught in widening ethics scandal

* SNC says it may not have been aware of all facts

* Former CEO left with C$5.0 million exit package

* CFO to be replaced, but will remain with SNC

Dec 13 (Reuters) - SNC-Lavalin Group Inc, 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 Nov. 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.   Continued...