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Kevin Lynch, SNC-Lavalin's chairman and board member since 2017, seen here at the company's annual general meeting in Montreal on May 3, 2018, will be stepping down as chair once a successor has been chosen for the board.

Graham Hughes/The Canadian Press

Kevin Lynch, the former top federal bureaucrat who lobbied the government on behalf of SNC-Lavalin Group Inc., is stepping down as the company’s chairman and will leave its board later this year.

Mr. Lynch, who joined the board in 2017, had been slated to continue in the chairman’s role and is standing for re-election at the company’s annual meeting on Thursday. The firm’s circular to shareholders, published March 16, made no mention of his potential departure.

Now, he says, he will step down from the chairman’s role and from the board once a successor is named, which he says he hopes will be done by September.

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Mr. Lynch said the company has completed its first stage of “renewal,” with a new chief executive and four new board members, along with the settlement of legal charges against the firm in December.

''This shift should include a new chair to help guide the implementation of the Company’s new direction during the coming years, a time when experience in business transformation and operations will be valuable," Mr. Lynch said in the statement.

He said the company’s renewal “has taken enormous efforts” and has “consumed much of my time as chair,” adding the global tumult over the COVID-19 virus and the need for the company “to navigate its strategic transformation through this unprecedented situation” helped to reinforce his decision.

Mr. Lynch’s departure from the chairman’s role also removes a link to the company’s recent, controversial past.

SNC faced charges of bribery from the activities of its construction division in its attempts to secure contracts in Libya. It became a political scandal after Prime Minister Justin Trudeau and other members of the government pressed Jody Wilson-Raybould to order a settlement with SNC during her tenure as justice minister and attorney-general.

The federal Ethics Commissioner found in August, 2019, that Mr. Trudeau broke the rules in directing government officials to find a solution to SNC’s legal troubles that would safeguard its interests. The report also revealed that Mr. Lynch made multiple attempts to lobby cabinet minister Scott Brison to help SNC avoid a criminal prosecution on charges of bribery. Michael Wernick, the Clerk of the Privy Council, also said that Mr. Lynch spoke with him about the matter.

SNC settled the matter in December, with the construction unit of the company pleading guilty to fraud, paying a $280-million fine, and receiving three years’ probation. A more potentially damaging charge of bribery under the Corruption of Foreign Public Officials Act was dropped.

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Mr. Lynch, 69, had a 33-year career in the Government of Canada until his retirement in 2009, serving as Clerk of the Privy Council, Secretary to the Cabinet and Head of the Public Service of Canada. He’s been Vice-Chairman of BMO Financial Group, an operating unit of Bank of Montreal, since 2010 and is also on the board of Canadian National Railway Co.

Mr. Lynch made $462,002 in his role as an SNC director in 2019, nearly all paid in company stock. He received $407,464 at CN, all in stock. Mr. Lynch’s BMO compensation is undisclosed.

In 2019, 11.3 per cent of SNC shareholders withheld their votes from Mr. Lynch’s re-election even though neither Institutional Shareholder Services nor Glass Lewis & Co., two major advisory services, recommended “withhold” votes for SNC’s board members. Withhold rates above 10 per cent are rare among companies in the S&P/TSX 60.

Both ISS and Glass Lewis have recommended voting “for” Mr. Lynch’s reappointment this spring.

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