MONTREAL – The Quebec Court of Appeal has rebuffed the provincial securities regulator, which feared there was a risk of “collusion” if SNC-Lavalin auditors were given details about its investigation into the scandal that has engulfed the engineering giant.
In a ruling issued Wednesday, Quebec’s highest court supported the review office of l’Autorite des marches financiers, which permitted an executive at SNC-Lavalin to provide details of the investigation to the company’s audit committee and external auditors Deloitte & Touche.
The Bureau de decision et de revision en valeurs mobilieres had authorized the committee and Deloitte to “review” all proposals for directing responses from the AMF for information and documents.
Some former employees of the Montreal-based firm have been accused of ethical breaches, including $56 million of payments to unknown agents and $160 million in alleged bribes to the family of deposed Libyan dictator Moammar Gadhafi.
In November, former company CEO Pierre Duhaime was arrested and charged with fraud involving about $22 million allegedly involving a super hospital in Montreal.
SNC-Lavalin (TSX:SNC) had argued that the accounting firm would likely not approve 2012 financial statements if it wasn’t informed about the nature of the AMF investigation.
Such a situation could create “confusion” in the markets, affect the company’s share price and even lead to SNC suffering “dramatic damage,” the company claimed.
The regulator had raised the risk of “collusion” by members of senior management of SNC-Lavalin, its directors and external auditors to undermine the investigation.
The regulatory body was ready to allow SNC to report the state of the investigation to its board, audit committee and Deloitte, but without providing details.
In his 19-page ruling, Justice Pierre Dalphond noted that the AMF provided no conclusive evidence of a risk of collusion. According to him, the bureau made a reasoned decision.
The AMF says it has not yet decided whether it will appeal the decision.
On the Toronto Stock Exchange, SNC’s shares closed up 31 cents at $46.34.