Michael D wrote:Two sides to every trade. There are buyers even now. Look at the overall impact of this news on the balance sheet, and it is pennies..
Now the question is what is the scale of these deficiencies... I now agree that its better to wait and see at this stage, even though it could be a missed buying opportunity.DBRS Places SNC-Lavalin’s BBB (high) Rating Under Review with Developing Implications
February 28, 2012
DBRS has today placed the Senior Debentures rating of SNC-Lavalin Group Inc. (SNC or the Company) at BBB (high) Under Review with Developing Implications. The rating action follows the Company’s announcement today that 2011 net profit would be $80 million or 18% below previously issued guidance and that the Company initiated an independent investigation of the facts and circumstances surrounding $35 million of payments documented to construction projects to which they did not relate.
DBRS recognizes that, by itself, the financial impact of the $80 million decrease in net profit is not material, considering that SNC would still expect to report about $350 million net profit, with strong company-level financial metrics and about $1.0 billion cash on hand (as reported on September 30, 2011). However, we are placing the rating under review because these latest developments could indicate possible deficiencies in the Company’s risk management and project control systems, including those related to offshore projects.
Quebec wrote:Any chance this suit is sucessful?Shine wrote:Class action shareholder litigation was initiated today against SNC.
and that that would be a good outcome. He stated that such lawsuits serve to keep Boards on their toes.adrian2 wrote:Yesterday on the Lang and O'Leary show, Kevin opined that it will be settled out of court in a few years for a max of 10% of the original amount.Quebec wrote:Any chance this suit is sucessful?Shine wrote:Class action shareholder litigation was initiated today against SNC.
The Company is working with its external auditors and legal advisors to resolve all issues relating to the investigation to permit the auditors to deliver their audit report on a timely basis. The Company is working towards announcing and filing its 2011 fourth quarter and year-end financial results as soon as reasonably possible and in any event prior to March 30, 2012.
Duhaime's resignation comes amid allegations he allowed more than $50 million worth of payments to "agents" in Libya and Tunisia. An internal review ordered by SNC-Lavalin showed that Duhaime authorized payments despite the objections of the company's chief financial officer.
“The matter was brought to the CEO [ADDED: Mr. Duhaime], who authorized or permitted [Mr. Ben Aissa - ADDED: a former executive] to make the payments through his division,” the company said. “While the CEO thought he had the authority to do so, he should have confirmed his authority but did not. The CEO’s authorization of these payments did not comply with the agents policy and therefore was in breach of the [company’s ethics] code.”
When Mr. Ben Aissa tried to get approval for the $33.5-million in agency payments, SNC’s chief financial officer and company chairman refused. However, Mr. Duhaime signed off on the payments and allowed Mr. Ben Aissa to make them through his division. The payments were supposed to help secure contracts but the board committee said it “found no direct and conclusive evidence establishing the exact use, purpose or beneficiaries of payments made under the [agreements]”.
Mr. Duhaime also knew that Mr. Ben Aissa had been hiring agents “in unusual circumstances” and that the agent fees were not being charged to the specific projects involved, the company said. Mr. Duhaime didn't see the agreements or accounting entries, “but should have known that contractual documents would refer to projects other than projects A and B and that incorrect entries would be made, which did not comply with the code,” the company said.
Shakespeare wrote:RCMP searching SNC-Lavalin headquarters - The Globe and Mail
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