SNC-Lavalin's Montreal offices raided by RCMP

RCMP investigators executeda search warrantFriday at the Montreal headquarters of engineering giant SNC-Lavalin, which has beenprobing millions of dollars of mysterious payments.

Two officers stood guard in the building's lobby at midday and preventedjournalists from entering the building.

SNC-Lavalin said it had no warning of the RCMP search but will co-operate with the investigation.

"It's important to understand that we have been forthcoming and as transparent as we can be, and have actually initiated certain conversations in order to show complete co-operation and collaboration," SNC-Lavalin spokeswoman Leslie Quinton said.

In an earlier statement, the company explained the warrant is linked to an investigation of "certain individuals who are not or are no longer employed by the company."

The company said it would provide no further comment.

SNC-Lavalinasked the RCMP earlier this year to investigateafter two top executives resigned amid allegations of wrongdoing.

The request came after an internalaudit into payments worth $56 million US that resulted in the resignation of companyCEO Pierre Duhaime andtwo other senior executivesvice-president Stphane Roy and executive VP of construction Riadh Ben Aissa.

SNC has been under pressure to explain the mysterious payments.

'The warrant relates to an investigation of certain individuals who are not or are no longer employed by the company.' Statement from SNC-Lavalin

Duhaime stepped aside after the internal probe reported he signed off on the payments, made toundisclosed agents on two large projects. The authorization breachedSNC'scode of ethics.

SNC-Lavalin has refused to indicate the whereabouts of the projects involved, or rule outwhether they included construction projects in Canada. However, the company has said that it didn't believe the payments in question were related to its operations in Libya.

SNC was one of the major Canadian companies doing business in the North African country prior to the fall of the late Libyan dictator Moammar Gadhafi last year.

SNC-Lavalin's recent troubles began when its name surfaced in connection with a Canadian consultant,Cyndy Vanier, who was arrested in Mexico on suspicion she had tried to smuggle membersof Gadhafi's family into Mexico.

RCMPquestioned Vanier in prison

Vanier has told CBC News that two officers from the RCMP's commercial crimes section visited her in her Mexican prison in mid-March.

She said they told her she was a witness, not a suspect, as they askeddozens of questions about her business dealings with SNC-Lavalin, specifically the two executives who hired her, Roy and Ben Aissa.

Vaniersaid she answered questions and signed statements for the RCMP until 4 a.m. on March 22.

The RCMP searches weren't unexpected given that in the company's last quarterly conference, management indicated they were handing over the results of their own internal investigation to authorities, said Neil Linsdell, an analyst who covers SNC for research firm Versant Partners.

"This seems like a logical follow-up... for the RCMP to make," he said.

On the TSX, SNC shareswere down Fridayby seven per cent, to $37.67.

Pierre Duhaimewill remain an SNC employee until June 27 but will not have any responsibilities ortake any policy-making decisions, the company said in a regulatory filing ahead of its May annual meeting.

Duhaime is slated to receive nearly $5 million as a severance package after he was relieved of his duties.