Author Topic: SNC - SNC-Lavalin Group  (Read 21769 times)

longlake95

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Re: SNC - SNC-Lavalin Group
« Reply #50 on: December 04, 2019, 07:24:51 AM »
Yup, thats it in a nut shell. Politics and scandal aside, their engineering services are world class. I know some mining engineers and they sub contract SNC and they don't bat an eye when hiring SNC.
I added this week at 23, after the down pressure of being kicked out of the MSCI world index. On November 26 SNC traded a whopping 11 million shares as the indexes dumped SNC. I guess markets aren't efficient after all, LOL. I think this pull back is no-brainer.

LL


« Last Edit: December 04, 2019, 07:37:11 AM by longlake95 »


no_free_lunch

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Re: SNC - SNC-Lavalin Group
« Reply #51 on: December 04, 2019, 08:21:49 AM »
I appreciate the feedback longlake.  Your comments on the other thread resulted in me investigating SNC and making the position, so thanks for that as well.

It's still a small/medium position but I am likely to increase it after I do a bit more work on it.

longlake95

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Re: SNC - SNC-Lavalin Group
« Reply #52 on: December 04, 2019, 08:31:03 AM »
it's a 6% position for me. Ya, my valuation is fuzzy, the range of outcomes is higher than I'd like. But, I like the back stop of the asset value behind the concession business combined with the good probability that earnings normalize over time....it's a good set up.  I really like that JF is back in...I believe Jarislowsky was on the board for many years - he know what SNC's earnings power is.


wisowis

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Re: SNC - SNC-Lavalin Group
« Reply #53 on: December 15, 2019, 12:17:31 PM »
https://montrealgazette.com/news/local-news/snc-lavalin-jury-in-corruption-trial-finds-bebawi-guilty-on-all-counts

Quote

Former SNC-Lavalin executive vice-president Sami Bebawi has been found guilty on all counts at his fraud and corruption trial.

Superior Court Justice Guy Cournoyer refused a request by Crown prosecutor Anne-Marie Manoukian that Bebawi be held in custody until a sentencing hearing on Thursday, saying his behaviour had not raised fears of him becoming a fugitive.

Bebawi, 73, courteously shook hands with Crown prosecutors before leaving the courthouse with his defence team. He refused to comment.

Manoukian said the jury had to study a large number of documents during its more than three days of deliberations, including evidence on foreign holdings, expert testimony on forensic accounting and legal concepts involved in the charges.

“We’d like to thank the members of the jury for their devotion to this trial as well as the deliberations and the work they had to do to render justice in this complex case,” she said.

Manoukian said the Crown would reveal its sentencing request at Thursday’s hearing.

Each of the convictions carries a maximum penalty of up to 10 years for money laundering and possession of property obtained by crime and up to 14 years for fraud.

Prosecutor Richard Roy said the case has demonstrated Canadian authorities’ determination to combat international business fraud.

“This case is another example of Canada’s commitment to fighting corruption of public officials and implementing its obligations under international conventions to fight corruption in international business,” he said.

The jury had been deliberating since Thursday in the trial, which began six weeks ago at the Montreal courthouse.

Serving as the firm’s executive vice-president from 2000 to 2006, Bebawi faced five charges in all: fraud, bribing a foreign public official — former dictator Moammar Gadhafi’s son, Saadi Gadhafi — laundering the proceeds of crime, and two counts of possessing property obtained by crime.

Throughout the trial, the Crown positioned Bebawi as the man behind what it described as SNC-Lavalin’s “business model” in Libya: paying millions in kickbacks and bribes to keep obtaining lucrative contracts.

“The company adopted an unusual, unlawful and dishonest practice,”  Manoukian told jurors in her closing arguments, “by artificially inflating the prices of contracts, paying bribes and misappropriating money for personal gain.”

A forensic accountant who analyzed SNC-Lavalin’s financial statements testified the firm transferred more than $118 million to Swiss bank accounts tied to a shell company. That company had been established by Bebawi’s subordinate in Libya, Riadh Ben Aissa.

“The amounts went in and out almost on the same day,” Sophie Déry told jurors. “It was an account used only as an extra layer when distributing money.”

Of that money, the Crown argued, Bebawi pocketed nearly $30 million. The millions were transferred into his and his uncle’s bank accounts.

The money was also used to pay Saadi Gadhafi in hopes of leveraging his influence in the country. The gifts culminated with the firm agreeing to buy Gadhafi a $25-million yacht shortly after he helped it secure a multimillion-dollar contract, the trial heard.

Bebawi did not testify or present a defence in the case.

In its closing arguments, his defence counsel argued the millions Bebawi received were not the result of crimes but rather company-approved bonuses for successfully manoeuvring complicated contracts in Libya’s difficult working conditions.

The defence also argued that Saadi Gadhafi should not be considered a foreign public official  — a key component for the corruption charge  — and that the Crown had built its case on unreliable witnesses.

Bebawi was not the leading force behind the firm’s Libyan dealings, it argued, but rather a middleman of sorts between Ben Aissa and CEO Jacques Lamarre, whom the defence says Bebawi often passed decisions off to.

“Ben Aissa understood the company and Libya better than Sami Bebawi,” defence lawyer Alexandre Bien-Aimé told jurors. “He was very well connected there, not Sami Bebawi.”

Ben Aissa, the Crown’s key witness in Bebawi’s case, pleaded guilty in Switzerland to charges of corrupting a foreign public official and laundering money in connection with his role in Libya. While in detention, he signed an agreement to co-operate with Canadian authorities.

Bebawi is the only SNC-Lavalin executive to be tried in Canada on corruption charges tied to the firm’s dealings in Libya. Another executive, Stéphane Roy, had faced similar charges, but they were stayed this year because of unreasonable delays.

Bebawi had also benefited from a stay of proceedings in a separate case in which he was charged with obstructing justice.

The jurors in his corruption case were presented evidence that an undercover investigation from the RCMP revealed that, through his lawyer, Bebawi had offered Ben Aissa a $10-million bribe to change his testimony.

The charges against Bebawi and the lawyer alleged to have been involved in the bribe, Constantine Kyres, were stayed this year because of delays. They had been filed in 2014.

SNC-Lavalin Group Inc. itself is expected to head to trial on corruption charges in 2020. It’s alleged the company paid Libyan government officials nearly $48 million between 2001 and 2011.

It is that case that’s behind the so-called SNC-Lavalin affair that ensnarled Prime Minister Justin Trudeau in controversy this year.

no_free_lunch

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Re: SNC - SNC-Lavalin Group
« Reply #54 on: December 15, 2019, 05:12:14 PM »
There was talk in summer of changes to the statute that covers SNC losing federal contracts. They wanted to water it down so officials can make the sentence less lengthy. Currently they could lose federal contract access for 10 years.

I am not sure how meaningful bebawis trial is. If anything it provides some cover as at least government can point to some type of punishment.  However with a minority government I don't know how much they can really do.

The whole thing is really too bad. I can't see other countries going after their own like this. It would be like Germany banning vw from selling domestically because of the emission scandal.

Cigarbutt

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Re: SNC - SNC-Lavalin Group
« Reply #55 on: December 16, 2019, 05:06:28 AM »
There was talk in summer of changes to the statute that covers SNC losing federal contracts. They wanted to water it down so officials can make the sentence less lengthy. Currently they could lose federal contract access for 10 years.

I am not sure how meaningful bebawis trial is. If anything it provides some cover as at least government can point to some type of punishment.  However with a minority government I don't know how much they can really do.

The whole thing is really too bad. I can't see other countries going after their own like this. It would be like Germany banning vw from selling domestically because of the emission scandal.
I've followed SNC for a long time. Their record, at some point, was very impressive (almost too good to be true) and it is too bad that such a record, at some point, included inputs that crossed lines that shouldn't have been crossed. Opinion: What happened with the superhospital contract is simply disgusting and evidence eventually showed (even if most of it was not disclosed due to early pleas) that the rot was global and profound. Corporate culture slipped sometimes in the years 2000s and eventually reached the point of no return.

The Bebawi case implies massive transfers of $. It is hard to imagine how the top guns and the Board were not aware of the dealings. It went further than 'wilful blindness'. The negative aspect of recent legal outcomes is that it shows how deeply the poor culture impregnated the crown jewel. The positive aspect is that those events happened a while back, public admonishments help to forgive and forget and recognition of cultural change comes with a lag.

Keeping access to contracts will be key and is achievable but the cost of redemption may be very high. It seems that they will come around but expensive fines should be expected. Siemens went through this in the 2000's. They also were threatened with loss of access to important sources of contracts. They used a different strategy than SNC and reacted to the issue more head-on which was more painful but which allowed to get out of the mess more decisively. 'Corruption' in construction contracts, especially in certain jurisdictions, is always present but needs to be contained. For the Siemens case, it is interesting to note that, up until 2002, the German tax code had a separate line item for cost of doing business where companies could claim costs related to bribing foreign officials.

https://www.npr.org/templates/story/story.php?storyId=98317332
https://www.theguardian.com/sustainable-business/recovering-business-trust-siemens
« Last Edit: December 16, 2019, 05:10:29 AM by Cigarbutt »

finetrader

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Re: SNC - SNC-Lavalin Group
« Reply #56 on: December 16, 2019, 07:35:43 AM »
I believe SNC will eventually get a DPA. Will cost them about 100M$CAD.
It it just the right thing to do for most stakeholders.

If it happens, the stock will fly.
Live to invest, invest to live

longlake95

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Re: SNC - SNC-Lavalin Group
« Reply #57 on: December 16, 2019, 07:41:20 AM »
Agreed - the government HAS to fine them for optics...but It will be very minor and it won't move the needle. SNC is an important business in Canada's PPP solution and a world class operator at the engineering level - a little less stellar at the C suite and board level. Its not in the governments best interest to snuff out SNC. People will love SNC again when its back in the 50's in a few years. LOL.

no_free_lunch

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Re: SNC - SNC-Lavalin Group
« Reply #58 on: December 16, 2019, 10:39:36 AM »
So I am really hoping you guys are right, and that there is just a fine.  However, technically that isn't an option currently unless they can somehow get a DPA or whatever the term is and that has been rejected.  Now that it is in trial things are a lot messier.  They actually might need to change statutes to impact the outcome and to do they will need to get one of the other parties to agree to the terms.  I don't know, maybe they can just slip it in with some other bill, they have their ways.  To me, this is the most critical thing to watch for.  As soon as you see legislation on amendments to that act, this becomes a strong buy for me.

finetrader

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Re: SNC - SNC-Lavalin Group
« Reply #59 on: December 16, 2019, 11:00:58 AM »
Live to invest, invest to live