Embattled Canadian construction firm SNC-Lavalin today promoted Ian L. Edwards to the post of interim president and chief executive officer to replace Neil Bruce, a British construction executive whom the company said was retiring effective immediately.
The surprise move, which caused an uptick in its share price, comes as the company is due in court on 28 June to face fraud and corruption charges. Prosecutors allege that former executives bribed officials in Libya to win contracts under the regime of Muammar Gaddafi, and also that they defrauded Libyan officials.
Pleading not guilty to the charges laid in 2015, the company has campaigned to be allowed to defer prosecution in exchange for fines, remediation and cooperation under a new scheme set up by the Canadian government for that purpose. However, Canada’s director of public prosecutions refused any such deal.
A political scandal then erupted over allegations that Prime Minister Justin Trudeau pressured the attorney general, MP Jody Wilson-Raybould, to allow SNC-Lavalin to avoid prosecution by participating in the scheme. She and another minister resigned from Trudeau’s cabinet over the matter, and have since been expelled from the governing Liberal Party.
Hope of avoiding a damaging trial evaporated on 29 May when a Quebec judge ruled there was enough evidence to send the corruption case to trial.
This week SNC-Lavalin asked for more time in deciding whether to face a jury or a judge in the trial.
Neil Bruce has complained that the corruption charges had cost the company "probably in excess of C$5 billion" in lost orders from wary clients. SNC-Lavalin maintains it has completely transformed itself since the corruption scandal ballooned in 2012.
Outside the corruption saga, SNC-Lavalin’s business has been suffering. Shares plummeted almost a third in January after it warned that its 2018 results would be hit by problems on a mining contract, and revealed an impairment charge of C$1.24bn in its Oil & Gas unit due to tensions between Canada and Saudi Arabia, where 15% of the company’s global staff work.
In May the company said it would pull out of 15 countries and avoid lump-sum EPC projects after making a net loss of US$13m in the first quarter of 2019. (See Further reading.)
Neil Bruce, who was executive director at British firm Amec before joining SNC-Lavalin as chief operating officer in 2015, will "return to his family in the UK", the company said, but will remain as an advisor to the board until the end of the year.
His replacement, Ian L. Edwards, has been chief operating officer since January. SNC-Lavalin said Edwards "has taken the lead in executing the initiative to simplify, focus, and grow the business".
In the next 60 days he will review the company’s strategy to "develop a plan for sustainable success, that de-risks and simplifies our business model and generates consistent earnings and cash flow", said SNC-Lavalin.
A member of the Chartered Institute of Building and a Fellow of the Institution of Civil Engineers, Edwards joined SNC-Lavalin in 2014 from the Leighton Group where he was managing director of Leighton Asia, India and Offshore.
SNC-Lavalin board chairman Kevin Lynch praised departing Neil Bruce.
"We very much benefited from Neil’s leadership over the past four years," he said. "His commitment to the Company, developing a world-class ethics and compliance regime, his leading role in the signature acquisition of Atkins, renewing the management team and delivering high levels of backlog have all been very important to SNC-Lavalin. We wish him well and the best in his retirement."
Neil Bruce commented: "In the past five years we have achieved much at SNC-Lavalin and I am leaving behind a business that is larger, more diverse, more international than the one I joined, as well as one that has a deeply embedded world-class approach to ethics. I am delighted that Ian has agreed to take the Company forward. His in-depth knowledge of the business, industry expertise and leadership skills will bode well for the future. I would like to thank all the employees for being such a great team, the top in the industry and I wish them all the very best."
Image: Neil Bruce, who retired today as SNC-Lavalin president and chief executive (SNC-Lavalin/Youtube)
Further reading:
- Embattled Trudeau expels "whistleblowers" from party in SNC-Lavalin crisis
- Reputation damage of corruption charges "more than $5bn", says SNC-Lavalin boss
- "Serious problem" on mining contract and trouble in Saudi Arabia gouge SNC-Lavalin shares
- SNC-Lavalin to pull out of 15 countries and focus on "core geographies"
