Embattled SNC-Lavalin chief Duhaime exits

Pierre Duhaime has handed in his resignation as SNC-Lavalin CEO following an investigation that revealed an unauthorised payment of $56m. Ian Bourne has been named interim CEO.

The deepening ethical quagmire surrounding Canada's SNC-Lavalin Group has culminated in the departure of chief executive Pierre Duhaime, who an internal probe blamed for wrongly laying out $56 million for undocumented business.

His exit marked the latest blow for publicly traded SNC-Lavalin, a global engineering and construction concern with a widely acknowledged reputation as a top-tier firm in the public-private partnership (PPP) market.

A month ago, the firm warned of weaker-than-expected quarterly performance. It also revealed that executive vice president for infrastructure Riadh Ben Aissa and vice president controller Stephane Roy has been fired for running afoul of ethical conduct – though the firm gave no reason why.

A report by CBC News tied Roy to Cynthia Vanier – a consultant he had hired to do fact finding work for the firm  – who was arrested in Mexico in connection with an alleged plot to help smuggle Saadi el-Qaddafi, son of deceased Muammar el-Qaddafi, the long time Libyan dictator, into the Latin American country. In its report, the Canadian media outlet also raised questions about the Ben Aissa-led infrastructure unit's business conduct in Libya.

Ben Aissa went on the offensive against his erstwhile employer. The fired executive issued a press release to “set the record straight,” claiming he made a “decision to resign”.

Then, on Monday, Montreal-headquartered SNC-Lavalin announced that Duhaime, named chief executive officer in 2009, had made a decision to step down, tendering his resignation to the company board. Duhaime began working for SNC-Lavalin in 1989.

Later, in an analyst conference call posted on its website, SNC-Lavalin detailed that its own investigation had determined Duhaime violated company policy. That probe, according to SNC-Lavalin, deemed Duhaime responsible for first improperly approving a $33.5 million payment, then authorising a second $25.5 million sum, without correctly accounting for either transaction.

The company could not pinpoint who received either payout, with Gwyn Morgan, SNC-Lavalin chairman, noting in the call that “we have not been able to get to the bottom of this, as to where the money went”.

Morgan went on to state SNC-Lavalin has turned over evidence found in its investigation to the Royal Canadian Mounted Police, the main law enforcement agency in Canada, adding he had “no idea” how the investigation would proceed, but stressed the company has pledged full cooperation with police.

SNC-Lavalin said Ian Bourne will act as interim CEO.