SNC-Lavalin drops 2 executives tied to Gadhafi family

Canadian engineering and construction firm SNC-Lavalin announcedlate Thursday that two executiveshave hastily left the company.

The move comes a day after CBC Newsreportedon internal turmoil at SNC-Lavalinover the firm'sinvolvement with Cyndy Vanier, a hired consultant now facing serious charges in Mexico.

SNC-Lavalin announced that Riadh Ben Assa, executive vice-president of the firms construction arm, is no longer employed by the company, effective immediately. Stphane Roy, who was a vice-president in finance, has also left the company.

"Questions regarding the conduct of SNC-Lavalin employees have recently been the focus of public attention," the company said ina news release. "SNC-Lavalin reiterates that all employees must comply with our Code of Ethics and Business Conduct."

As reported by CBC News, Roy went to Mexico on Nov. 11, 2011, for a planned meeting with Vanier, a Canadian woman who stands accused in an alleged plot to smuggle members of Libyan dictator Moammar Gadhafis family into Mexico.

Hired Vanier in July

Roy had originally hired Vanier in July 2011 to travel to Libyaon a fact-finding missionfor SNC-Lavalin, which has billions of dollars in construction projects procured under the Gadhafi regime. In October, she moved her base of business operations to her winter home in Bucerias, Mexico, and continued to work for the company.

At the time of her arrest, Vanier was arranging meetings between Mexican officials and Roy on potential water treatment projects.

CBC News has learned that an SNC-Lavalin executive questioned the proposed meeting and told Vanier in early November the company was not interested and cancelled it. However, the company has acknowledged that Roy still went to Mexico.

Vanier was arrested a day before Roy arrived in Mexico. Instead,he met with Gabriela Davila Huerta, one of Vanier's associates, but during their meeting police took Huerta into custody too, accusing her of being part of the Gadhafi plot.

In late January, SNC-Lavalin spokesperson Leslie Quintonstated that the company had "not been involved with Ms. Vanier since the fact-finding mission in early summer 2011."

However,CBC News revealed last week that Roy was at the scene of the arrest in Mexico of Vanier's associate. The company said he was notcharged.

'You hope this is an isolated incident, but they're battling with previous scandals like the RCMP raid of their Oakville [Ont.] office.' Neil Linsdell, Versant Partners

The company has not addressed questions of who in the firm ordered, or knew, about Roys trip to Mexico to meet with Vanier.

Neil Linsdell of Versant Partners called the revelations "unfortunate."

"You hope this is an isolated incident, but they're battling with previous scandals like the RCMP raid of their Oakville [Ont.] office," said Linsdell, who added that the company's aggressive response to the report could help to address concerns, especially among the North African country's new government.

"These things are going to get very high profile for a short period of time, then I think they'll eventually lose their place in people's consciousness," he said.

Linsdell believes SNC-Lavalin has a good chance of regaining $1 billion worth of contracts including a prison and the Great Man-Made River water supply project in Libya for which it took full writedowns last year. However, the timing is another question.

Maxim Sytchev of Alta Corp Capital said the Middle East, where it has had a strong presence for decades, is important for the company.

"When the time is right I believe they are going to be able to capture those projects. We just don't know whether they are going to be able to get it back at the same margins that they were able to derive prior to the Gadhafi fiasco."

SNC-Lavalin insiders have told CBC Newsthey fear the companys construction division, headed by Ben Assa, has lost its "moral compass" in the past year in Libya.They claim SNC-Lavalin put profits before ethics when last year the company won a $275-million US contract to build a prison for Gadhafi's regime, known for brutal oppression and mistreating political opponents

The insiders also question why SNC-Lavalin hired Vanier for a fact-finding mission to Libya in July when the entire enterprise was being orchestrated as a propaganda effort by Saadi Gadhafi, the son of the now deposed dictator who oversaw the awarding of many contracts won by SNC-Lavalin.

A CBC News investigation found that in late August and early September 2011, Ben Assa and SNC-Lavalin paid to fly one of Saadi Gadhafis personal bodyguards, Gary Peters, from Canada and host him in Tunis.

Peters claimed he was at SNC-Lavalins offices in Tunis, where he and Ben Aissa held a video conference with Saadi Gadhafi and Stephane Roy, talking about potential plans for Gadhafis movements.

In the ensuing days, Peters left Tunisia and entered Libya to join an armed convoy to escort Saadi Gadhafi and his entourage to the border with Niger. Peters said he stopped at the border, but Gadhafi crossed over in violation of UN travel bans and has stayed in Niger, despite an international warrant issued for his arrest.

Quintonsaid in an email that Peters went to Tunis to meet company officials but said the meeting did not result in any contract or business arrangement between SNC-Lavalin and Peters.

"SNC-Lavalin did notand would not sanction an attempt at an extraction mission or any other action that would contravene local or international laws or regulations," Quinton said.