SNC-Lavalin hit with $250M class action suit
SNC-Lavalin logo. Etienne Laberge/QMI Agency
MONTREAL - A law firm has asked a judge to approve a $250-million class-action lawsuit against engineering giant SNC-Lavalin, whose officials are accused of conducting "unlawful activities in Libya."
Quebec City-based Siskins, Demeules also alleges that SNC released "materially false and misleading" information about its "code of conduct, legal compliance and internal controls."
Furthermore, the application claims that "SNC and certain members of its senior management team were engaged in unlawful activities in Libya .. contrary to the defendants' ... statements."
People who acquired SNC shares between March 13, 2009, and February 28, 2012, are eligible to join the class action.
A judge has yet to approve the lawsuit and none of the allegations have been proven in court.
The company announced an internal investigation Tuesday into $35 million that had been earmarked for construction projects but which ended up being spent elsewhere.
The company did not specify what happened to the $35 million, leading to speculation that it could be related to the company's alleged ties to Libya's Gadhafi regime.
SNC announced last month that two senior employees, including an executive vice-president, are "no longer with the company."
The news came amidst a growing scandal involving a woman hired by SNC to go on a "fact-finding mission" in Libya in July.
In November, Cynthia Vanier, 52, of Mount Forest, Ont., was arrested in Mexico, accused of trying to sneak Moammar Gadhafi's son, Saadi Gadhafi, and three other family members into the country.
While no one at SNC has been found guilty of any wrongdoing, the recent headlines have raised questions about the company's 35-year presence in Libya.
SNC suspended all its projects in Libya in 2011 as a popular revolt swept the North African country.
Gadhafi was killed in October, and Libya is currently under the control of what is being referred to as a transitional government.
Libyan projects represented roughly 7% of SNC's 2010 revenues, the company said. SNC generated more than $6.3 billion as of Dec. 31, 2010, according its annual report, meaning roughly $440 million came from Libya.
SNC-Lavalin lost 20% of its stock market value on Tuesday after it announced that it would fall $80 million short of its 2011 net income targets.
The value of SNC-Lavalin shares on the Toronto Stock Exchange fell from $48.37 on Tuesday to $40.22 on Friday, a loss of just over 16%.
The company's biggest single shareholder, billionaire Stephen Jarislowsky, reportedly lost $200 million in the plunge.