OTTAWA – The Supreme Court of Canada has refused to overturn an appeal court ruling that allowed a an SNC-Lavalin corporate executive to provide details of a Quebec securities regulator’s investigation to the engineering company’s audit committee and external auditors.
The high court said Thursday that it won’t hear l’Autorite des marches financiers’ appeal of the Quebec Appeals Court ruling.
The provincial regulator had feared there was a risk of “collusion” if SNC-Lavalin (TSX:SNC) auditors were given details about its investigation into the scandal that has engulfed the engineering giant.
“We are pleased with the Supreme Court decision,” SNC-Lavalin spokeswoman Leslie Quinton said in an email Thursday.
The AMF said it takes note of the decision.
“We knew that less then 10 per cent of that type of demand are accepted by that tribunal (the Supreme Court),” said spokesman Sylvain Theberge.
The AMF’s review office – the Bureau de decision et de revision en valeurs mobilieres – had sided with SNC and rebuffed the regulator by authorizing SNC’s audit committee and Deloitte & Touche to “review” all proposals for directing responses from the AMF for information and documents.
The regulator then took the decision of its review office to the Quebec courts, but the courts ruled against it.
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. Former CEO Pierre Duhaime has been charged with fraud involving about $22 million allegedly involving a super hospital in Montreal.
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SNC-Lavalin 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 has previously said.
The regulatory body was ready to allow SNC to report the state of the investigation to its board and audit committee and to Deloitte, but without providing details.
The appeals court said the AMF provided no conclusive evidence of a risk of collusion, adding that the review bureau had made a reasoned decision.
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