Skip to main content

SNC-Lavalin President and CEO Neil Bruce says the legal uncertainty 'clearly affects the short-term future of the company.'

Graham Hughes/Canadian Press

The chief executive of SNC-Lavalin Group Inc. says he’s worried about the company’s immediate future because of the legal uncertainty hanging over the business, but he’s not concerned about a takeover bid.

“I think [the legal uncertainty] clearly, clearly affects the short-term future of the company,” Neil Bruce said in an interview on Thursday in London, where the company has just opened a new European headquarters. “I’m not particularly worried about a takeover per se, but I am worried about the damage that these [legal] things continually do to the innocent,” he added, referring to employees and shareholders.

The Montreal-based engineering giant has been grappling with legal turmoil since last October when the Public Prosecution Service of Canada decided against negotiating a settlement, known as a deferred prosecution agreement, to resolve charges of attempted bribery and fraud. The charges were filed in 2015 and they relate to allegations SNC paid millions of dollars in bribes to officials in Libya between 2001 and 2011.

Story continues below advertisement

On Thursday, The Globe and Mail reported that then-justice minister Jody Wilson-Raybould faced pressure from the Prime Minister’s Office to urge federal prosecutors to change their minds but she refused to intervene. The PMO has denied directing Ms. Wilson-Raybould “to draw any conclusions on this matter.”

Prime Minister Justin Trudeau is denying that his office 'directed' former attorney general Jody Wilson-Raybould to help SNC-Lavalin avoid a criminal prosecution. The Globe and Mail never reported that officials in Mr. Trudeau’s office had directed Ms. Wilson-Raybould to take action – only that she was pressured to do so and declined.

Although SNC is very much pushing for a deferred prosecution agreement, Mr. Bruce said he was unaware of any political pressure and he didn’t comment on how the new Justice Minister, Montreal MP David Lametti, who took over last month, would handle the file.

Related: Conservatives, NDP seek to launch investigation into allegations of interference by PMO, Scheer says

Related: PMO pressed Wilson-Raybould to abandon prosecution of SNC-Lavalin

Opinion: Trudeau chooses not to be clear on what happened with SNC-Lavalin

“We’ve got no visibility about pressure or anything else,” he said. “We’ve no idea what goes on in the Justice Department. They don’t dialogue with us and we don’t dialogue with them.” He added that it was “really important that [the Department of Justice] or the Prosecution Service pursue the individuals responsible and at the same time try best not to do any harm to the innocent people, and innocent people being defined as employees, shareholders, pensioners.”

Quebec Premier François Legault has expressed concern that SNC could be vulnerable to a takeover because of the legal issues and, in December, he told a Montreal radio program that provincial government officials had indications of interest from foreign buyers. Mr. Bruce said the company had not received any takeover offers or approaches. “I believe that being Canadian-based, Quebec-headquartered, is a differentiator for the company.”

Story continues below advertisement

Mr. Bruce also sought to clarify the extent of the damage being done to the company as a result of Canada’s diplomatic feud with Saudi Arabia. That country represents around 11 per cent of SNC’s revenue and, last week, the company announced a $1.24-billion write down on its oil and gas division, mainly because of the tension between Canada and Saudi Arabia over Ottawa’s public pressure on Riyadh to release jailed dissidents.

Jody Wilson-Raybould arrives at Rideau Hall in Ottawa, on Monday, Jan. 14, 2019. The PMO has denied directing Ms. Wilson-Raybould 'to draw any conclusions on this matter.'

Adrian Wyld/The Canadian Press

The announcement on Jan. 28 sent SNC’s share price down 28 per cent to $33.21 in Toronto, although the price has since recovered to around $37.

“We have not been removed from existing contracts [in Saudi Arabia]. It’s a large part of our business that continues to operate,” he said on Thursday. “What we’re seeing, and what we’ve seen recently, is a change in terms of our ability to win new work.”

He added that SNC used to win about one in three or one in four contracts that it bid on in Saudi Arabia. “That’s not happening any more. And we’ve had clear messages as well from various entities in Saudi Arabia that until the diplomatic relations are back to more normal, it’s unlikely that we will win any work.”

Related: Trudeau says he didn’t direct Wilson-Raybould on SNC-Lavalin case

Opinion: The SNC-Lavalin revelations show we are not a country bound by the rule of law

Story continues below advertisement

It’s unclear how long the diplomatic strain will continue, but Mr. Bruce is hopeful the Saudis won’t punish the company in the long term. “I don’t think they’d hold a grudge. I just think they’re looking for a return to more normal intergovernment relations.”

He also confirmed the company is struggling with cost overruns involving the construction of two sulfuric acid plants for Chile’s state mining company Codelco. He had declined to identify the project last week when the trouble was first disclosed by SNC, although analysts suspected it was Codelco. “We are confident that it is an isolated case,” he said without providing details. “Unacceptable, but an isolated case.”

Mr. Bruce has been in London this week to open SNC’s new European head office. That’s something of a departure for many international companies that have been pulling out of Britain over fears about Brexit. Mr. Bruce said the company had been planning a London office ever since it bought British engineering firm WS Atkins PLC in 2017 for $3.6-billion.

SNC now has 10,000 employees in Britain including 1,200 in central London. Mr. Bruce added that Brexit won’t have much of an impact on SNC because most projects across Europe are run locally and the company doesn’t have many cross-border services that could be impacted once Britain leaves the European Union.

“We’re fairly confident that in the round we’ll see modest growth through this period, not a decline. We think 2-per-cent or 3-per-cent growth looks like the forecast for the work that we’re doing in the U.K.”

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter