April 10, 2015 by On-Site Magazine
SNC-Lavalin has filed a lawsuit seeking to recover more than $127 million that it alleges was embezzled by two former senior executives and their associates, The Canadian Press is reporting this morning.
The embattled engineering and construction firm is seeking payment mainly from former construction vice-presidents Riadh Ben Aissa and Sami Bebawi.
In a motion to institute proceedings in Quebec Superior Court, SNC-Lavalin (TSX:SNC) said $127.2 million was “fraudulently diverted…and thereafter distributed to or for the benefit of the defendants Ben Aissa and Bebawi as well as to their respective friends, families and related legal entities.”
The alleged incidents occurred over a decade between 2001 and 2011 and relate to two major construction projects in Libya, an airport and a water diversion.
SNC is claiming money that it says was tied to the projects but allegedly funnelled to entities registered in the British Virgin Islands and Panama that were secretly owned by Ben Aissa. Others named in the lawsuit are a Swiss lawyer and banker and their respective firms.
None of the claims in the April 2 filing by the Montreal-based company has been proven in court. Lawyers for the two men didn’t immediately respond to requests for comment.
The lawsuit is in addition to SNC’s efforts to recover $22.5 million allegedly paid to Ben Aissa and others related to a Montreal hospital construction contract.
Mounties alleged in February that between 2001 and 2011 SNC-Lavalin paid nearly $47.7 million to public officials in Libya to influence government decisions. It also charged the company, its construction division and its SNC-Lavalin International subsidiary with defrauding various Libyan organizations of about $129.8 million. The company has said it will plead not guilty.
Several ex-officials, including Ben Aissa and Bebawi, face criminal charges in Canada.
In its 15-page lawsuit, SNC alleges Ben Aissa never disclosed to senior management other than Bebawi that he was the owner of the entities he had selected to receive a percentage of the contract awards. The company also said Ben Aissa launched false integrity check certifications of one of the entities.
SNC-Lavalin said it only became aware of this when Swiss authorities and the RCMP executed two search warrants at the company’s Montreal head office in April 2012.
It says nearly $67.8 million of the funds received by the entities were distributed to Ben Aissa, and $13.7 million to Bebawi.
The company, whose reputation has taken a beating since irregularities first surfaced three years ago, said it also plans to announce a claim for damages prior to trial to recover the allegedly embezzled funds.
Ben Aissa was charged with fraud-related offences in Canada after he was extradited from Switzerland last October. Swiss authorities had sentenced him to the 29 months he’d served in jail on charges relating to SNC-Lavalin’s business in Libya. They also ordered him to repay millions of dollars to the company.
Ben Aissa acknowledged in Swiss court that he bribed Saadi Gadhafi, son of Libya’s late dictator, Moammar Gadhafi, so SNC could win contracts. Ben Aissa also admitted to pocketing commissions.
Bebawi was charged by the RCMP last year. In February 2014, the Mounties charged Bebawi with fraud over $5,000; two counts of laundering proceeds of crime; four counts of possession of property obtained by crime, and with bribing a foreign public official. In September 2014, the RCMP charged him with obstructing justice.