MONTREAL — SNC-Lavalin says the World Bank has given the Quebec engineering firm an early reprieve from its list of banned companies over corruption tied to contracts in Bangladesh and Cambodia .
In a press release on Tuesday, the Montreal-based company says the international financial institution had agreed to lift sanctions imposed on it and scores of affiliates that were initially to be spread over a decade.
The move means SNC-Lavalin will be able to resume bidding and carry on work funded by the World Bank and several regional banks that are expected to deploy US$160 billion by the end of June in developing countries.
It is also expected to have a positive impact on the reputation of the company, which has taken a series of steps in an attempt to turn the page on its image, which has been marred by corruption scandals.
When it cracked down on SNC-Lavalin in 2013, the World Bank stressed that the 10-year delisting was the "longest exclusion period ever." The blacklisting was reduced to eight years since the firm met the international institution's compliance requirements.
SNC-Lavalin CEO Ian Edwards says the company had "done its homework" since 2012.
"Over nearly 10 years, we evolved through honest reflection, hard work and a sustained commitment by and toward all our employees, leading to the integration of integrity best practices," he said in a statement.
In December 2019, SNC-Lavalin reached an agreement to set aside charges of fraud and corruption filed in 2015 by the Royal Canadian Mounted Police for acts committed in Libya between 2001 and 2011. This was accompanied by a $280-million fine. The company was able to retain the right to bid on federal government contracts.
Sabahat Khan, an analyst with RBC Dominion Securities, says the early lifting of sanctions is a positive development for SNC-Lavalin from a reputational perspective.
"From a financial perspective, revenues that SNC generated from the World Bank and associated entities were immaterial at the time of the settlement in 2013 so we do not expect this announcement to be material from a financial perspective," he wrote in a research note.
This report by The Canadian Press was first published April 20, 2021.
Companies in this story: (TSX:SNC)