SNC-Lavalin shares jump on Trudeau re-election

Shares in Canadian construction giant SNC-Lavalin made big gains last week when the re-election of Canadian Prime Minister Justin Trudeau revived hopes that the firm might yet avoid a damaging bribery trial and get a deferred prosecution agreement.

Trudeau, whose Liberal Party lost 29 seats in the poll on Monday, 21 October – but retained power as a minority government – has supported leniency for SNC-Lavalin, the Montreal-headquartered firm that faces a trial on charges of bribing officials for contracts in Libya during the Gaddafi regime.

In August he was found by Canada’s ethics watchdog to have broken conflict of interest rules in pressuring his former attorney general to let the firm have a deferred prosecution agreement. 

The opposition Conservative Party exploited the scandal, with its leader Andrew Scheer promising a judicial inquiry into the SNC-Lavalin affair.

"It’s good for SNC," said Karl Moore, a professor in management at McGill University, to national broadcaster CBC. 

"I think the market sees it, not unreasonably, that they are in better shape than if the Conservatives had come in."

The day after the election SNC-Lavalin’s shares closed up nearly 14%, or C$2.44, at C$20.12. The following day they closed higher, at C$20.78.

Since January SNC-Lavalin’s share price has fallen by around 63%.

Canada’s new attorney general David Lametti – who replaced Jody Wilson-Raybould, the former attorney general who told MPs she felt improperly pressured by Trudeau’s office to allow a deferred prosecution agreement – has refused to rule out such an agreement. 

Image: Justin Trudeau greets supporters in Montreal the day after the 21st October 2019 election (Justin Trudeau/Twitter)

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