Investors launch $1.5B lawsuit against Canadian engineering firm
Swiss authorities are holding a former SNC-Lavalin executive in connection with his dealings in North Africa with Muammar Gaddafi.
Investors launched a $1.5-billion class-action lawsuit against embattled engineering firm SNC-Lavalin today, blaming directors for the company’s plummeting stock price, The Canadian Press reported.
The Montreal-based company’s stock dropped 20 percent – or about $1.5 billion – on Feb. 28 when it launched an investigation into $35 million worth of undocumented payments.
Those payments stem from alleged dealings in Libya with that country’s former dictator, Muammar Gaddafi.
“When a company repeatedly highlights its strong governance practices to the investing public, revelations of serious misconduct cause damage to the company’s reputation and, in turn, substantial harm to its investors,” lawyer John Archibald said, CP reported.
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Share prices that once peaked at $59.97 fell 28 cents to $36.77 in afternoon trading today on the Toronto Stock Exchange.
The lawsuit, brought by Rochon Genova LLP for investors outside the province of Quebec, is the second launched this year, the Financial Post reported.
In March, a Quebec-based law firm launched a $250-million claim accusing the company of illegal activity.
At its annual shareholder meeting last week, chairman Gwyn Morgan said SNC-Lavalin’s own investigation found no link to Gaddafi.
The company did admit, however, to finding $56-million worth of payments to unidentified foreign agents.
That’s not enough for shareholders, a lawyer representing them told the FP.
“In order for shareholders to get to the bottom of this, there has to be a meaningful investigation that is not conducted by those that are potentially responsible,” Joel Rochon said.
A judge must now rule before the lawsuit can proceed, CBC News said.
The judge will also determine if there’s an identifiable class of plaintiffs.
“We plan to vigorously defend ourselves, since we think we have always we have always published information appropriately and accurately, following regulatory requirements and best practices regarding timely corporate disclosure,” SNC-Lavalin representative Leslie Quinton told CBC.
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