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An early photo of Riadh Ben Aissa. (SNC-Lavalin)
An early photo of Riadh Ben Aissa. (SNC-Lavalin)

BUSINESS SCANDAL

The combustible fortunes of SNC-Lavalin's man in the Middle East Add to ...

SNC-Lavalin Group Inc. had a name for Riadh Ben Aissa. He was one of the company’s “firemen.”

Mr. Ben Aissa, a Tunisian-born executive, had a knack for getting the company out of sticky situations in far-off countries where few western multinationals dared go. Whether it was persuading a client in Tunisia to drop a lawsuit against SNC or cozying up to Moammar Gadhafi to win lucrative contracts in Libya, Mr. Ben Aissa found a way to make things work. SNC valued his talents enough that the engineering giant put him in charge of its global construction division, which included projects in dozens of countries and more than 10,000 employees.

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Everything changed in February: suddenly the fireman was extinguishable. Mr. Ben Aissa was drummed out of SNC, accused of allegedly making $56-million in payments to unknown commercial agents to help win contracts. By then he'd also been in the eye of the storm over his close ties to the Gadhafis, now out of favour in the West after a popular rebellion in Libya.

The scandals continued. The company recently forced out chief executive Pierre Duhaime over his alleged role in the payments to agents. An RCMP investigation is under way and the company has been scrambling to reassure investors. Its Montreal headquarters was raided last week.

SNC said it's co-operating with the RCMP and has insisted that most of the problems were isolated to Mr. Ben Aissa and a small group of insiders. The company “has provided information to the appropriate authorities and is co-operating fully with them on these and any other matters,” spokesman Leslie Quinton said.

A key issue, according to someone familiar with the probe, is that Mr. Ben Aissa and Stephane Roy, a division controller who has been dismissed, had the power to authorize large expenditures because of the nature of construction projects. Mr. Roy was supposed to act as a check on Mr. Ben Aissa, but the board alleges the two worked in concert for years. Investigators are now trying to piece together how various expenditures were booked in the division and where the money actually ended up. The board also learned about some of the unusual business connections between the company, Mr. Ben Aissa and some family members. The investigation is continuing and the improper payments could yet exceed $56-million, a source said. Mr. Ben Aissa has denied any wrongdoing and has threatened to sue the company over his dismissal.

The company has depicted Mr. Ben Aissa as a rogue operator, acting outside the ethical code of the company. For decades, however, he has very much been a creature of the company that benefited from the fruits of his ambition.

Former and present SNC-Lavalin employees are divided about Mr. Ben Aissa's legacy, some reverent, others cautionary. Some executives describe him as driven and adept in an area of the world where most Westerners flounder. Another former executive credited Mr. Ben Aissa with almost single-handedly landing a lucrative contract with Saudi Arabia's state-run oil giant Aramco. “All of this takes years to get it said and done – to develop the contacts, the opportunities, etcetera. I give him credit for that, because many tried before.” Another vice-president who worked closely with Mr. Ben Aissa described his approach as using “all means necessary.”

But an SNC official who worked closely with Mr. Ben Aissa after the merger said the company's man in the Middle East was like a lone wolf and his success made him less accountable. The former executive, who agreed to speak on the condition that he was not identified by name, said that in the mid-1990s he was alarmed to learn that Mr. Ben Aissa's then brother-in-law was a shareholder in the firm's Saudi subsidiary – meaning he shared in profits earned by the company in that country. When the executive made inquiries about how the Saudi subsidiary had been structured, he received an explicit warning from a colleague: “Don't you dare badmouth or lay a finger on this guy Ben Aissa.”

Mr. Ben Aissa has since divorced that wife and the agreement is no longer in place.

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