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		<title>Private market investors neglect risk in rush for returns</title>
		<link>https://igopp.org/en/private-market-investors-neglect-risk-in-rush-for-returns/</link>
		<comments>https://igopp.org/en/private-market-investors-neglect-risk-in-rush-for-returns/#respond</comments>
		<pubDate>Wed, 04 Dec 2024 15:16:42 +0000</pubDate>
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		<description><![CDATA[The recent scandal involving Adani Group and Canadian pension fund CPDQ exposes flagging standards as investors rush for private markets across emerging markets in Asia. [&#8230;] François Dauphin, who leads the Montreal-based Institute for governance of private and public organisations, identifies a concerning trend. He notes the investors&#8217; due dilligence is suffering under pressure to [&#8230;]]]></description>
		<content><![CDATA[The recent scandal involving Adani Group and Canadian pension fund CPDQ exposes flagging standards as investors rush for private markets across emerging markets in Asia.

[...]

François Dauphin, who leads the Montreal-based Institute for governance of private and public organisations, identifies a concerning trend.

He notes the investors' due dilligence is suffering under pressure to deploy capital quickly and achieve returns, often in unfamiliar investment vehicules.

''In recent years, there has been an abundance of capital from private funds or institutional funds looking for private investments opportunities to improve their total returns,'' Dauphin told AsianInvestor.

''The appeal of private placements lies in the potential of high returns, but the level of risk associated with such projects is also necessarily higher. This is all more true when distance does not allow for direct monitoring.''

Numerous institutional have rushed past standard risk assessment procedures in eagerness to secure leading investment positions, he added.

''This compromised approach to due dilligence has inevitably, led to adverse outcomes, as evidenced by the current situation in India.''

Read more [1]

[1] https://igopp.org/wp-content/uploads/2024/12/ASIANI1.pdf]]></content>
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		<title>What was the story behind SNC-Lavalin&#8217;s supposedly &#8216;excellent&#8217; corporate governance regime?</title>
		<link>https://igopp.org/en/nota-bene-what-was-the-story-behind-snc-lavalins-supposedly-excellent-corporate-governance-regime/</link>
		<comments>https://igopp.org/en/nota-bene-what-was-the-story-behind-snc-lavalins-supposedly-excellent-corporate-governance-regime/#respond</comments>
		<pubDate>Thu, 21 Mar 2019 23:16:18 +0000</pubDate>
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		<guid isPermaLink="false">https://igopp.org/nota-bene-what-was-the-story-behind-snc-lavalins-supposedly-excellent-corporate-governance-regime/</guid>
		<description><![CDATA[Excerpted and translated from “Le fiasco SNC-Lavalin: crime, culture, governance?” by Yvan Allaire, executive chairman of the Institute for Governance of Private and Public Organizations, published in Policy Options March 18, 2019.  The tragedy of SNC-Lavalin was in the making between 2000 and 2012. To outside observers, these were years of quiet profitability for the [&#8230;]]]></description>
		<content><![CDATA[Excerpted and translated from “Le fiasco SNC-Lavalin: crime, culture, governance?” by Yvan Allaire, executive chairman of the Institute for Governance of Private and Public Organizations, published in Policy Options March 18, 2019. 

The tragedy of SNC-Lavalin was in the making between 2000 and 2012. To outside observers, these were years of quiet profitability for the company. And yet, these years were teeming with fraudulent and corrupt activities carried out by some managers and executives of SNC-Lavalin. For reasons that are little understood (but should be), a culture of duplicity, greed, and flouting of ethical norms had taken root in the management of the company — with the board of directors totally unaware, it seems.

Yet at the time, SNC-Lavalin was highly rated for the quality of its governance. According to the annual ranking of some 250 Canadian companies for the quality of their governance published by The Globe and Mail, SNC-Lavalin got top ranks: 1st in 2005 and 2009, 2nd in 2006, 3rd in 2008, 7th in 2003, 2011 and 2012. How could it be that such “excellent” corporate governance did not detect any sign of malfeasance nor trigger any alarm?

All boards of directors rely on the information that is passed on to them by management, which is assumed to be honest and reliable. That is the Achilles heel of governance.

So, if management lies to the board or provides false information, how can the board be blamed? This argument, although legally valid, is not fully satisfactory. What could SNC-Lavalin’s board of directors have known? What questions should have been asked of management of the company at the time?


For instance:



— Who decides, and on what basis, to seek contracts in countries with exotic political mores?

— Who has the authority to approve sales agent contracts and assess that the amounts paid to them are appropriate?

— How does the company manage to be so successful in these countries?

— What is the opinion on these matters of the seven (out of 12) board members who indicated on the Skills Matrix that they “are familiar with the geographic areas where the company operates”?

The board of directors at the time may have raised these issues and management might not have been forthcoming. Except for its somewhat limited curiosity, the board observed all the rules of “good” governance (according to The Globe and Mail). Boards of directors, in the traditional form of governance, are always a bit like skaters making arabesques on a frozen lake, unaware of the teeming activities under the ice. This form of governance must be changed…

Has the company sacked or sued all the managers responsible for this corrupt culture in the years 2000 to 2012? The Canadian anti-corruption law makes that a key factor in deciding whether to come to a deferred prosecution agreement with an indicted company.

If no such factors can be invoked, it is difficult to understand why the prosecutors of the Canadian justice department refuse to come to an agreement with SNC-Lavalin.

Indeed, the Canadian anti-bribery legislation should be modified and stipulate that a corporation is liable to criminal charges if its board of directors has authorized or endorsed criminal acts or failed to put in place all necessary safeguards and exercise appropriate oversight of management. However, this argument has not been raised so far in the present case.

Read more [1]

[1] https://business.financialpost.com/opinion/nota-bene-what-was-the-story-behind-snc-lavalins-supposedly-excellent-corporate-governance-regime]]></content>
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		<title>&#8216;It’s sad&#8217; no one asked questions while SNC profits soared: Ex-Caisse exec</title>
		<link>https://igopp.org/en/its-sad-no-one-asked-questions-while-snc-profits-soared/</link>
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		<pubDate>Thu, 14 Feb 2019 16:19:39 +0000</pubDate>
		<dc:creator><![CDATA[IGOPP Site web]]></dc:creator>
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		<description><![CDATA[The long series of scandals ensnaring SNC-Lavalin Group Inc.  has one former executive of the Caisse de dépôt et placement du Québec calling for more accountability when it comes to corporate bribes for global contracts. Michel Nadeau, a former deputy chief executive of Caisse – the largest shareholder in SNC – told BNN Bloomberg on [&#8230;]]]></description>
		<content><![CDATA[The long series of scandals ensnaring SNC-Lavalin Group Inc.  has one former executive of the Caisse de dépôt et placement du Québec calling for more accountability when it comes to corporate bribes for global contracts.

Michel Nadeau, a former deputy chief executive of Caisse – the largest shareholder in SNC – told BNN Bloomberg on Wednesday that when he left his role in 2003, the Quebec pension fund was not aware of any corruption or fraud activity related to SNC’s construction projects in Libya at the time.

Nadeau noted that under former SNC chief executive Pierre Duhaime, who pleaded guilty Feb. 1 for his role in a bribery scandal [1] around the construction of a Montreal hospital, the company’s average profit rose substantially.

“When you double your profits, shareholders, directors – they will never ask, ‘Why are you doubling the profits? What is the secret?’” said Nadeau, now executive manager with the Institute for Governance of Private and Public Organizations in Montreal.

“It’s because you have contracts which are much more profitable than your usual activity. Nobody is raising questions on how you’re making much more profits. And it’s sad, but we should be aware.”

SNC’s average profit from 2006 to 2008, three years prior to Duhaime becoming president and CEO in 2009, was $208 million. Between 2009 to 2011, with Duhaime at the helm, the company’s average annual profit nearly doubled to $404.95 million.

In February 2015, SNC and two of its subsidiaries were charged with paying nearly $48 million to public officials in Libya between 2001 and 2011 to influence government decisions. The RCMP has also charged the company, its construction division and a subsidiary with one charge each of fraud and corruption for allegedly defrauding various Libyan organizations of roughly $130 million. If found guilty, SNC could be barred from bidding on federal contracts for a decade.

Nadeau added that SNC’s past practices followed many other large engineering firms that pay bribes, which has led some Canadian companies like WSP Global Inc. to focus its business in developed countries.

“Unfortunately, it is a reality,” he said.  “I think if you look at large French, German, American corporations, you have to do this if you want to have access to contracts.”

“So that’s why if you want to go into emerging countries, unfortunately in some of them – not all of them – you have to give bribes.”

To access this interview, please click here. [2]

[1] https://www.bnnbloomberg.ca/former-snc-lavalin-ceo-pierre-duhaime-pleads-guilty-in-bribery-case-1.1207899
[2] https://www.bnnbloomberg.ca/it-s-sad-no-one-asked-questions-while-snc-profits-soared-ex-caisse-exec-1.1214272]]></content>
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		<title>SNC-Lavalin pushes government on maintaining local expertise</title>
		<link>https://igopp.org/en/snc-lavalin-pushes-government-on-maintaining-local-expertise-2/</link>
		<comments>https://igopp.org/en/snc-lavalin-pushes-government-on-maintaining-local-expertise-2/#respond</comments>
		<pubDate>Tue, 02 Jul 2013 20:45:00 +0000</pubDate>
		<dc:creator><![CDATA[mlamnini]]></dc:creator>
				<category><![CDATA[IGOPP in the Medias]]></category>
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		<guid isPermaLink="false">http://aimta712.org/?p=2892</guid>
		<description><![CDATA[&#8220;[&#8230;]“Today, it must be recognized that the integral application of this law could lead to unjust consequences for tens of thousands of innocent workers and to the destruction of an industry that’s vital to the Quebec economy,” Yvan Allaire, chairman of Montreal’s Institute for Governance of Private and Public Organizations, wrote in a July 2 [&#8230;]]]></description>
		<content><![CDATA["[...]“Today, it must be recognized that the integral application of this law could lead to unjust consequences for tens of thousands of innocent workers and to the destruction of an industry that’s vital to the Quebec economy,” Yvan Allaire, chairman of Montreal’s Institute for Governance of Private and Public Organizations, wrote in a July 2 opinion piece published on the website of business magazine Les Affaires.

Mr. Allaire argues that engineering firms found guilty of past wrongdoing should be allowed to resume their normal public contract work on condition they reimburse the sums they received illegally and pay a 20% penalty. He argues municipalities are also to blame for their poor financial controls and should also shoulder some of the repayment costs.

Mr. Card has met privately with Quebec Premier Pauline Marois and senior PQ staff in recent weeks in a bid to express his view on SNC’s ethical shortcomings and the steps it has taken to improve governance. The company employs 34,000 employees, including thousands in its Quebec home base.

The decision to list itself with the lobbyist registry was done “to be as absolutely transparent as possible,” said SNC spokesperson Leslie Quinton. “We have heard of companies who have had people in social settings being accused of lobbying, so we decided to be proactive and register anyone who could conceivably have any contact with government authorities, however innocuous.”

The company does not intend to actually conduct any more lobbying than it has in the past, Ms. Quinton said.

She declined to comment on Quebec’s anti-corruption law specifically. “We would like to be able to discuss openly and constructively the potential impact of government laws on our company and our people, which is not limited to any single law.”

SNC-Lavalin has submitted its documentation to obtain its ethics certificate from the AMF. To date it has not received a response, Ms. Quinton said." Read more [1]

[1] http://business.financialpost.com/2013/07/02/snc-lavalin-quebec-lobbying/]]></content>
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		<title>The last temptation of Mr. Harrison</title>
		<link>https://igopp.org/en/la-derniere-tentation-de-hunter-harrison/</link>
		<comments>https://igopp.org/en/la-derniere-tentation-de-hunter-harrison/#respond</comments>
		<pubDate>Mon, 16 Jan 2012 22:51:35 +0000</pubDate>
		<dc:creator><![CDATA[mlamnini]]></dc:creator>
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		<guid isPermaLink="false">https://igopp.org/la-derniere-tentation-de-hunter-harrison/</guid>
		<description><![CDATA[E. Hunter Harrison retired as CEO of the Canadian National Railways Corporation on December 31st 2009. His was a good, lucrative run at CN. On his leaving CN, he held $ 77 million in unexercised options with a further $18 million in restricted shares to vest in the future. He is receiving a pension of [&#8230;]]]></description>
		<content><![CDATA[E. Hunter Harrison retired as CEO of the Canadian National Railways Corporation on December 31st 2009. His was a good, lucrative run at CN.

On his leaving CN, he held $ 77 million in unexercised options with a further $18 million in restricted shares to vest in the future. He is receiving a pension of $1,590,000 a year.

In 2008 and 2009, he earned cash compensation of some $10 million and in 2009 exercised stock options that brought him some $31 million.

He was paid, upon retirement, a sum of US$350,000 for two years for compliance with non-compete restrictions in his contract. Technically, that agreement ended on December 31st 2011.

So, the man now raising horses in Florida is certainly one of the roughly 2000 people in the USA worth more than $100 million. But he is reportedly restless, looking for ways to use his boundless energy and vast experience. That is all very understandable, very human.

However, the opportunity comes from an activist hedge fund intent on bringing changes to Canadian Pacific. The fund wants Mr. Harrison to take over as CEO of CP and thus, unfortunately, to become the leader of a prime competitor of CN. That a hedge fund would make such an offer does not surprise. It is shocking, however, that Mr. Harrison would consider seriously going to work against all his former colleagues at CN and try hard to destroy the value of the company that made him wealthy.

CN is claiming that there are legal restrictions on Mr. Harrison going to work for a direct competitor. Whether there are such restrictions may be largely irrelevant in the contemporary world of finance.

But, in the world of normal people, in the realm of industry and commerce, there are moral and ethical restrictions on such behavior. Have we come to the point where one who has been highly paid to run a company may then jump without reprobation to run its direct competitor?

If Mr. Harrison really wants to use his experience, talent and energy for good, why does he not offer his services, pro bono, to help the numerous railway companies in the developing world that would surely greatly benefit from his talent and experience.
]]></content>
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