A Canadian engineering giant is facing a $1.5 billion class action after being accused of controversial ties with Libya throughout the Gadhafi regime has contributed to plummeting asset value.
Law firm Rochon Genova LLP has announced the billion-dollar suit against engineering firm SNC-Lavalin after accusations arose over the firm’s handling of accurate disclosure of controls and procedures, and their financial reportage.
“When a company repeatedly highlights its strong governance practices to the investing public, revelations of serious misconduct cause damage to the company’s reputation and, in turn, substantial harm to its investors,” says Rochon lawyer John Archibald.
The suit has been brought on behalf of the investors who entered into a securities purchase between February, 2007 and February, 2012 and will seek $1.5 billion in response to the alleged misrepresentations of the company and a further $150 million in punitive damages.
In a statement from Rochon Genova, the company alleges the engineering firm has misled investors and committed securities violations.
“(An SNC) investigation … found the company had made $56 million of improper payments to foreign agents,” says the statement. “Those payments had been authorized by the company’s former CEO Pierre Duhaime.”
Duhaime was ousted in March as a result of the controversy.
SNC has acknowledged $35 million had been earmarked for construction projects in Libya but ended up being spent elsewhere. The lawsuit alleges that former executive vice-president of infrastructure projects, Riadh Ben Aissa made efforts to “secure contracts in Libya by strengthening the Company ties to the Gaddafi regime and making undisclosed payments to members, associates, and agents of the regime.”
Aissa was arrested last month by Swiss officials in light of money laundering, corruption and bribery charges in relation to conduct in Libya.
The case has not yet been brought before the courts, which have yet to hear the full allegations. The lawsuit is shocking the engineering community around the world, with SNC-Lavalin’s actions bringing all involved in Libyan engineering projects into question.
By Tim Moore