If convicted of fraud and bribery charges, SNC-Lavalin could end up being taken over by another company and its 9,000 jobs in Canada could move abroad, the engineering firm’s CEO told Radio-Canada in an interview today.
“If we were convicted further down the line … if we’re barred from doing federal work, then the people doing federal work today will have to do something else. That may be in Canada or it may be outside Canada,” Neil Bruce said.
Analysts have countered that argument, pointing out that more than half of those 9,000 workers are currently engaged in multibillion-dollar construction projects that are years from completion, and that it’s unlikely SNC will be prevented from bidding on provincial contracts.
He also said that while he never told officials in the Prime Minister’s Office that a federal prosecution would leave SNC-Lavalin vulnerable to a foreign takeover, it’s a possibility.
Bruce said that over the past year, the company’s stock value has dropped by 25 per cent. It first took a hit of 10 per cent when it disclosed that its work in Saudi Arabia — where it also employs 9,000 people — was drying up.
SNC-Lavalin saw a further 15 per cent drop in its share price, Bruce said, when it announced it was not going to be permitted to deal with bribery and fraud charges through a new Canadian law that would allow the company to escape prosecution by meeting conditions laid out in a remediation agreement.
“So 25 per cent off, in terms of the value of the company, in a period where our earnings and our revenues and our backlog are pretty stable,” he said, arguing that the depressed share price doesn’t reflect the company’s true value — which could make it a ripe target for a takeover bid.
“Ultimately, people will look at it and say, ‘Well, SNC-Lavalin is worth more than the current share price.'”
Bruce said that he met Conservative Leader Andrew Scheer on three occasions and the Opposition leader was “very supportive” of the company.
Scheer has since been tearing into the Liberals daily over the SNC-Lavalin scandal — which was touched off by former justice minister and attorney general Jody Wilson-Raybould’s allegation that officials in the Prime Minister’s Office and elsewhere in government inappropriately pressured her to clear a remediation agreement for the company. In January, she was shuffled out of her cabinet post — a move she said was punishment for not following the PMO’s marching orders.
Bruce said he now finds Scheer’s public position on his company difficult to understand.
“I am quite puzzled in terms of the position,” Bruce said. “I mean, I understand the politics of it but in terms of looking at … you know it’s not just about jobs, it’s actually about people. We’ve got 9,000 employees that feel quite bitter about this.”
Company could ‘eventually’ leave Canada
Liberal MPs on the justice committee voted yesterday to end the committee’s inquiry into Wilson-Raybould’s claim.
Prime Minister Justin Trudeau has said that no improper pressure was applied to Wilson-Raybould, but the conflict of interest and ethics commissioner is proceeding with his own inquiry into the matter. Gerry Butts, the former principal secretary to Trudeau, said Wilson-Raybould was not removed from the justice ministry as a punishment.
Bruce said that while he did not tell PMO officials a failure to secure a remediation agreement could see the company relocate abroad, it could happen.
“It’s not something that we are currently looking at. But if you look at every eventuality, then part of it is really about emphasizing probably doing more work outside the country then we are currently capable of doing.”
He also said that 82 per cent of the company’s shares are owned by Canadians and that there are advantages to being based in Montreal. But for now, the company’s priority is to build a defence they can present in a court of law.
“We want to be able to address the issues of the past and be clear. We have apologized on a number of occasions for what went on prior to 2013. Everything you see are things that happened between seven and 20 years ago and we want to move on and create an even bigger, better Canadian champion headquartered in Montreal,” he said. “That’s our objective.”