Embattled engineering giant SNC-Lavalin is facing its second-class action lawsuit in months with a Toronto firm seeking $1.5 billion on behalf of investors outside of Quebec.
Rochon Genova LLP announced the lawsuit Wednesday, alleging the Montreal-based company violated securities law by misrepresenting that it had adequate controls and procedures to ensure accurate disclosure and financial reporting.
The claim arises from alleged payments made by SNC-Lavalin to members, associates, and agents of the Gadhafi regime to secure contracts for infrastructure projects in Libya.
The allegations have not been proven in court.
It follows a $250-million claim filed in March on behalf of investors in Quebec.
Shares of SNC-Lavalin dropped more than 20 per cent on Feb. 28, wiping out more than $1.5 billion of market value after the company disclosed the launching of an investigation into $35 million of undocumented payments.
Nearly $3.5 billion has been wiped from the company’s value since SNC’s shares peaked at $59.97.
The initial review led to the company finding $56 million of payments to unidentified foreign agents.
The company insists that none of the funds were directed to Libya.
Former CEO Pierre Duhaime approved payments suggested by former executive vice-president Riadh Ben Aissa, SNC’s former head of construction, who is in a Swiss jail on suspicion of corrupting a public official, fraud and money laundering tied to his dealings in North Africa.
Duhaime, Ben Aissa and former controller Stephane Roy have left the employ of SNC-Lavalin.
The lawsuit has been brought on behalf of all SNC-Lavalin investors, excluding residents of Quebec, who purchased securities of SNC-Lavalin between Feb. 1, 2007 and Feb. 28, 2012 or who purchased debentures of the company through the company’s June 2009 prospectus offering.
(Source: Toronto Star)