SNC-Lavalin Group Inc.’s new chief executive officer Robert Card is putting his stamp on the beleaguered engineering firm with a major shakeup in the executive ranks and in the company’s structure.
Montreal-based SNC said Friday it is bringing in an outsider – Neil Bruce, former executive director and chief operating officer of British engineering company Amec – to fill the newly created role of president of resources and environment.
Mr. Bruce – who last year was awarded the title of officer of the Order of the British Empire – will also become a member of the influential inner circle known as the Office of the President.
The newly formed resources and environment group will include SNC’s global business in hydrocarbons and chemicals (H&C), mining and metallurgy (M&M), environment and water.
The unit is to be SNC’s largest and most diverse, active in most of the 100 countries where SNC is present.
Mr. Bruce, to be based in London, is tasked with overseeing a global growth strategy for these sectors, the company said in a news release.
SNC is also creating a global operations group. Former executive vice-president for Europe – Christian Jacqui – will become executive vice-president of global operations, spearheading a globalization drive of the company’s operations.
The changes involve another executive departure, as well.
Patrick Lamarre – son of former SNC chief executive Jacques Lamarre – has stepped down as executive vice-president of the Global Power unit, to be replaced on an interim basis by the head of the AltaLink subsidiary, Scott Thon.
“These changes represent part of our ongoing effort to further strengthen the company’s management structure and extend its scope,” said Mr. Card in a statement.
“These announcements are an opportunity to unroll some of the company’s preliminary strategic orientation, of which there will be more to follow in the months to come.”
Mr. Card came aboard last October as the company overhauls its operations and governance, ethics and compliance measures after being shaken by a series of scandals involving alleged fraud and unethical behaviour by top officials, including former CEO Pierre Duhaime.
Mr. Duhaime was arrested in November by Quebec’s anti-corruption squad on charges of fraud, conspiracy to commit fraud and using forged documents. The charges are related to SNC’s contract to build McGill University Health Centre’s new $1.3-billion superhospital.
Riadh Ben Aïssa, a former SNC executive responsible for global construction projects, faces the same charges.
He is being held in a Swiss jail since April as part of an international probe into alleged corrupt payments in North Africa.
Both Mr. Duhaime and Mr. Ben Aïssa left the company last March amid allegations involving $56-million in undocumented payments to commercial agents.
SNC also recently shuffled its chief financial officer, Gille Laramée, to another position in the company.
The company is also dealing with allegations that some of its employees bribed government officials in Bangladesh in order to clinch a $10-million contract related to a bridge-building project in that country.
Alta Corp. Capital analyst Maxim Sytchev said in a research note Friday that the hiring of Mr. Bruce – whose former firm is focusing on the environmental, water, power and natural resources sectors – indicates that Mr. Card envisions a similar approach at SNC.
The changes announced at SNC on Friday also signal an alignment of the engineering and construction company’s units along more global lines, Mr. Sytchev said.
The moves should help in SNC’s efforts to restore damaged investor confidence, he said.
“Given the #1 and #2 executive pedigree that now resides at SNC-Lavalin, investors should feel increasingly more comfortable with the turnaround/strengthening potential of company’s Engineering & Construction business,” he said.
Analyst Pierre Lacroix of Desjardins Securities said in a note: “We believe the addition of Mr. Bruce to SNC’s executive team and the Office of the President is significant, given that the expertise and relationships he acquired at AMEC could be useful in developing the SNC franchise, especially in oil and gas. Prior to serving as AMEC’s COO, Mr. Bruce led the expansion of the company’s natural resources division, which covered global activities in oil & gas, oil sands and mining.
The announcement should help provide a boost to SNC’s shares, he said.
The shares have taken a beating from the corruption allegations – none of which have been proven in court – over the past year.Report Typo/Error