MONTREAL- SNC-Lavalin Group Inc. shares shot up Tuesday after the Liberal election win left open the possibility of a plea deal on fraud and corruption charges against the engineering firm.
The beleaguered company’s shares were up than 14 per cent or $2.50 at $20.18 in mid-afternoon trading, buoyed by investor hopes that the Liberal refusal to close the door on a deferred prosecution agreement will play out to SNC-Lavalin’s advantage ahead of a criminal trial.
“It’s good for SNC,” said Prof. Karl Moore of McGill University’s Desautels Faculty of Management said of the return of a Liberal federal government led by Prime Minister Justin Trudeau.
“I think the market sees it, not unreasonably, that they are in better shape than if the Conservatives had come in.”
Conservative Leader Andrew Scheer has lambasted Trudeau for allegedly pressuring former attorney general Jody Wilson-Raybould to halt the criminal prosecution of SNC-Lavalin.
Canada’s ethics commissioner concluded in August that Trudeau breached a section of the ethics code by improperly pressuring former attorney general Jody Wilson-Raybould to end criminal proceedings against SNC-Lavalin.
Trudeau has said he disagrees with the commissioner’s findings but accepts them.
Analyst Chris Murray of Altacorp Capital said that a resurgent Bloc Quebecois, which more than tripled its seat count to 32 on Monday, could fan hopes that the new Parliament might work to help the Montreal-based multinational.
“With the performance of the BQ and the fact of a minority government, maybe some folks are optimistic that there could be a solution presented,” Murray said.
“I’d also caution that there is a lot history here…While it is up, I would be caution against getting too optimistic,” he added.
SNC-Lavalin declined to discuss the government’s intentions or comment on the ongoing court case.
Attorney General David Lametti has refused to shut down the possibility of a remediation agreement with SNC.
The company has seen its market value fall by roughly 60 per cent since January amid the SNC political scandal in Ottawa.
SNC faces an upcoming trial on charges of fraud under the Criminal Code and bribery under anti-corruption legislation