One analyst says the reputational damage of a looming corruption case could hurt the company more
MONTREAL — As a scandal surrounding SNC-Lavalin Group Inc.’s lobbying efforts to avoid criminal charges continues to plague the federal government, it remains unclear exactly what a conviction would mean for the company.
Analyst Yuri Lynk of Canaccord Genuity said the reputational damage of a looming corruption case could hurt the company more than a decade-long ban on federal contract bidding. The company currently employs about 10,000 people in the United Kingdom, more than the 8,500 or so stationed in Canada. However, the advantages of moving abroad are unclear.
Canada’s recent free trade deal with the EU allows European companies to bid on Canadian government contracts, potentially opening a door to SNC-Lavalin through subsidiaries, such as the London-based WS Atkins, that are not listed in the criminal case, analyst Derek Spronck of RBC Dominion Securities said in a research note.
One possible workaround lies in the public services minister having the power to reduce or waive bidding bans under certain circumstances, said international trade lawyer Lawrence Herman.
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