Lawsuit seeks $1.5 billion in compensation, citing misrepresentations in relation to company's governance practices
TORONTO, May 9, 2012 /PRNewswire/ - Rochon Genova LLP has commenced a global class action in Ontario on behalf of investors of SNC-Lavalin Group Inc. (TSX: SNC.TO
The claim arises from allegedly unlawful payments made by SNC-Lavalin to members, associates, and agents of the Gaddafi regime to secure contracts for infrastructure projects in Libya. It alleges misrepresentations in SNC-Lavalin's filings, including that the company was a responsible corporate citizen with sound corporate governance practices and had adequate controls and procedures to ensure accurate disclosure and financial reporting. The allegations are not yet proven.
On February 28, 2012, the company's shares dropped over 20%, a market loss of over $1.5 billion. This steep decline followed a press release in which SNC-Lavalin revealed that its Board of Directors had launched an investigation into $35 million of undocumented payments. That investigation later found the company had made $56 million of improper payments to foreign agents and that those payments had been authorized by the company's former CEO Pierre Duhaime.
Commenting on the Board's findings and SNC-Lavalin's governance, Fred Lazar, Associate Professor of Economics at the Schulich School of Business said: "How can directors not ask the obvious questions and still claim that the Board is following good corporate governance practices? Unfortunately, some directors choose not to ask so that they have 'credible deniability'. Don't ask and the company doesn't tell, and then, when a scandal breaks, you have your defence: you didn't know."
According to John Archibald, a lawyer with Rochon Genova: "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."
The lawsuit has been brought on behalf of all SNC-Lavalin investors, excluding residents of Quebec, who purchased securities of SNC-Lavalin between February 1, 2007 and February 28, 2012 or who purchased debentures of the company through the company's June 2009 prospectus offering.
SOURCE ROCHON GENOVA LLP
Nasdaq quotes delayed at least 15 minutes, all others at least 20 minutes.
Markets are closed on certain holidays. Stock Market Holiday List
By accessing this page, you agree to the following
Press Release Service provided by PRConnect.
Stock quotes supplied by Telekurs USA
Postage Rates Bots go here