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Bombardier sale of turboprops to Algerian airline under investigation: report

By: Ross Marowits, The Canadian Press

Tuesday, Feb. 26, 2013 at 11:21 AM | Comments: 0

A sign marks the entrance of a Sonatrach Petroleum state owned gas plant, in Ain Amenas, Algeria on Jan. 31, 2013 THE CANADIAN PRESS/AP

MONTREAL - Bombardier Aerospace says it has no reason to be concerned about an Algerian investigation into the sale of eight aircraft to a local airline belonging to state-owned Sonatrach Petroleum Corp., which has been named in an investigation into engineering giant SNC-Lavalin.

Spokesman Marc Duchesne said the Montreal-based aircraft manufacturer sold the planes directly to Tassili Airlines and didn't use the services of an agent, whose name has come up in connection with contracts won by SNC-Lavalin (TSX:SNC).

"We have not been contacted by any government on this matter," Duchesne said in an interview Tuesday.

"It's pure speculation. There is no basis and no facts to support a connection between Bombardier and this Algerian issue."

According to a media report in Algeria citing unnamed sources, local authorities are examining a contract signed in 2006 for four Q400 aircraft worth US$84 million. Four smaller Q200 aircraft were ordered a year later.

Two other aviation companies, Airbus and ATR, also bid on the contracts, but those bids were never made public. A complaint was launched in 2006 on the awarding of the contracts.

"We follow a very thorough due diligence process and I can confirm that this transaction was conducted in the same manner," Duchesne added.

Bombardier (TSX:BBD.B) CEO Pierre Beaudoin attended the signing of the contract in the presence of company officials and Chakib Khelil, then minister of energy and mines, who left his position in 2010 in a corruption scandal.

Khelil is a close friend of Farid Bedjaoui, a Montreal-educated agent employed by SNC-Lavalin to help win at least $1 billion in contracts with Sonatrach.

Bedjaoui is suspected of involvement in more than $200 million of payments from several companies in the oil and gas services sector.

SNC-Lavalin's reputation has been tarnished over the lengths it went to obtain contracts.

Its former CEO, Pierre Duhaime, has been charged with fraud in connection with its winning efforts to build a Montreal super-hospital.

The former head of international construction, Riadh Ben Aissa, has been jailed in Switzerland since April on charges relating to alleged corruption, fraud and money laundering in North Africa — a region where SNC-Lavalin also has major operations.

On the Toronto Stock Exchange, Bombardier shares were up one cent at $3.99 in midday trading.

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