SNC-Lavalin Group Inc. says a total of 32 people made amnesty requests under its three-month program encouraging employees to blow the whistle on corruption within the company.
Meanwhile, the engineering and construction giant says it’s looking to sell an equity stake in wholly owned Alberta electricity transmission company AltaLink as part of its strategic plan.
The amnesty program failed to ferret out any new information “of a material nature” regarding alleged ethical violations in addition to those already uncovered within the company, Montreal-based SNC said Monday.
Still, SNC said in a news release that “the information the company received did confirm its previous assessment of corruption risks.”
SNC launched the program – which lasted from June 3 to August 31 of this year – in May and said at the time it was the first such action in Canadian corporate history.
The company has been overhauling its company-wide ethics and compliance framework in the wake of a series of corruption-related financial scandals both at home and abroad.
It said on Monday that it is making major strides towards its goal of implementing its ethics and compliance system, with efforts initiated last year having been accelerated in 2013.
A key part of the new framework was the hiring of Andreas Pohlmann as chief compliance officer.
Mr. Pohlmann was previously at Siemens AG where he spearheaded similar moves to eliminate corruption and impose a wide-ranging ethical practices policy.
Reporting to him directly are compliance officers at SNC’s offices and regional hubs around the world.
Other measures include publication of an anti-corruption manual distributed to all 32,000 employees, a new policy regarding relations with business partners, employee compliance training and the hiring of an independent monitor reporting to the World Bank, which funds infrastructure projects around the world.
SNC negotiated an agreement with the bank that bars the company from bidding on projects for 10 years after allegations that two former SNC employees were part of a scheme to bribe government officials in Bangladesh in relation to construction of a bridge.
The company has seen several top executives – including the chief executive officer – leave over the past two years.
Regarding AltaLink, SNC said in a separate news release Monday that selling an equity stake in the wholly owned unit is “an important step forward in the implementation of the Company’s strategic plan” outlined at the annual meeting last May.
SNC president and chief executive officer Robert Card has previously stated he wants to retain as “core” holdings AltaLink and the company’s 16.8 per cent interest in the 407 toll road in Ontario but that the company could reduce its interests in its concession assets in order to unlock shareholder value.
“AltaLink is a tremendous asset. The ongoing expansion program will continue to position it for substantial growth,” Mr. Card said in a statement Monday.
“Through the Company’s expertise in Transmission & Distribution project development, AltaLink has become a unique asset that has achieved the strategic objectives necessary to offer value to new investors, whether public shareholders or financial or strategic partners,” he said.
AltaLink owns more than half of Alberta’s transmission grid and serves 85 per cent of the population.
The company said on Monday it will explore all options for the sale of an unquantified stake in AltaLink, including a private sale, public market alternatives or a strategic partnership.
“This announcement represents a significant advancement of our plan to rebalance our portfolio of infrastructure concessions to build value for our Company,” said SNC executive vice-president of infrastructure concession investments Gerry Grigoropoulos.
Earlier this month, SNC said it had struck a deal to sell 66 per cent of its minority interest in a group that owns a power plant – Astoria II – in New York City.
Mr. Card has outlined a plan to target growth in the engineering and construction segment of its businesses with emphasis on resources, including oil and gas, mining and metallurgy, and environment and water.
Also slated for growth are SNC’s existing clean-power and infrastructure E&C businesses, with a continued presence in services such as project financing, engineering, construction and operations and maintenance.
Dundee Capital Markets analyst Maxim Sytchev said in a research note Monday that the start of a sale process for AltaLink is a positive for SNC, which faces capital spending requirements of between $600-million and $1-billion at AltaLink over the next three years.
He also said the consensus view is that the AltaLink concession is undervalued.Report Typo/Error