SNC’s developing drama

Chetumal Prison in Quintana Roo, Mexico is not a good place to do time.

It’s a minimum security facility, surrounded by a 10-metre high wall with barbed wire on top. Food is served in a pail, and a bed is a shabby mattress atop a concrete slab.

It’s in this prison that Cyndy Vanier, accused mastermind in a cloak-and-dagger plot to smuggle Saadi el-Qaddafi, son of late Middle East dictator Muammar el-Qaddafi, out of Libya and into Mexico, is being held.

Ontario native Vanier headed her own business, providing ‘dispute resolution’. In protesting her innocence, Vanier, 52, has claimed wrongful imprisonment. She’s called on the Canadian government for help.

She’s also asserted that she was in Mexico and Libya on business, hired by Canada’s SNC-Lavalin Group, a publicly-traded engineering concern well established in public-private partnerships (PPPs).

SNC-Lavalin has publicly denied knowing Vanier. Nonetheless, the firm has suffered a tumbling stock price amid a deepening controversy surrounding alleged corruption, mismanagement and mysterious spending.

To understand the significance of recent developments, it’s important to note that SNC-Lavalin has a long and proud history. 

Switzerland-born Arthur Surveyer formed engineering firm Surveyer, Nenniger & Chenevert (SNC) in 1911, in a partnership with Emil Nenniger and Georges Chenevert.

In 1991, SNC merged with rival Lavalin, and the re-combined SNC-Lavalin would grow to become a 29,000-employee global company, listed on both the New York Stock Exchange and the Toronto Stock Exchange.

By the new millennium, Montreal-headquartered SNC-Lavalin Group had established itself as a major participant in the nascent market for PPPs in North America, as well as worldwide. 

In 1999, bidding in a consortium with Cintra and Macquarie Group, SNC-Lavalin won what was – and is – widely considered a milestone PPP deal, the 99-year concession for Ontario’s  407 Express Toll Route (407 ETR), the world’s first electronically operated toll road.

With a strong position in its domestic market, the company by 2011 had made inroads into emerging markets like India, Russia and the Middle East. That November, the name Cyndy Vanier, and her alleged relationship with SNC-Lavalin, came to light.

Police in Mexico arrested – and later charged – Vanier for a failed scheme to charter a private plane intended to traffic Saadi el-Qaddafi into Latin America after his father was overthrown and killed.

Vanier claimed she had rented the aircraft for SNC-Lavalin, apparently at the behest of company controller Stephane Roy and executive vice president of infrastructure Riadah Ben Aissa.

Police raided SNC-Lavalin’s Toronto office and the company, which has a 25-year history in Libya, released Roy and Ben Aissa from its payroll, announcing their departure in February 2012. (Ben Aissa issued a statement claiming he had chosen to resign).

As the year progressed, further question marks were raised – this time at the highest executive level.

EXIT DUHAIME

In March, with $56 million unaccounted for, and thought to have perhaps been spent improperly, chief executive Pierre Duhaime handed in his resignation.

A company man, Duhaime had joined SNC-Lavalin in 1989, earning his role at the helm in 2009.

The engineering firm admitted to finding that Duhaime had first approved a mysterious $33.5 million payment, followed with a later $25.5 million payout, in an internal probe.

SNC-Lavalin turned over the evidence of its investigation into Duhaime to the Royal Mounted Canadian Police (RMCP).

“We have not been able to get to the bottom of this, as to where the money went,” confirmed Gwyn Morgan, SNC-Lavalin chairman and a noted Canadian businessman.

Ian Bourne replaced Duhaime as interim chief executive officer. Duhaime was awarded a $5 million severance package.

BLACKLISTED

A week after Duhaime was ousted, the World Bank, the international organisation dedicated to third world economic development, brought a punitive injunction against Duhaime’s erstwhile employer.

The World Bank temporarily banned SNC-Lavalin from doing business with it, citing a failed bid on a $3 billion project in Bangladesh.

The RMCP raid on SNC-Lavalin’s Toronto office was connected to the project: a multi-purpose bridge to cross the Padma River. The World Bank had put up $1.5 billion to fund the bridge.

A second RMCP search, this time of SNC-Lavalin’s Montreal headquarters, followed. The company on its website acknowledged the raid was taking place, calling it an investigation of personnel no longer employed by the company.

Wall Street responded negatively. SNC-Lavalin’s stock, which has plummeted 25 percent this year, dropped 4.2 percent that day, and was trading at just over $38 a share at press time. 

The police say their investigation is ongoing.