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Kerala scam accused company posts $80-million profit

business Updated: Aug 10, 2009 10:58 IST
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Canada's SNC-Lavalin, which is at the centre of the alleged Rs 300-crore ($60 mn) bribery scandal in Kerala, has reported a higher profit of $80 million for the second quarter of 2009 - up from $75 million during the same period in 2008.

The Montreal-based company said the increase in its profit was "mainly due to higher contributions from the power and infrastructure and environment segments, partially offset by a loss in chemicals and petroleum.''

One of the leading engineering and construction companies in the world, SNC-Lavalin has operations in about 100 countries.

In a chargesheet filed on June 11, the Central Bureau of Investigation (CBI) had named the Montreal-based company along with Kerala CPM secretary Pinarai Vijayan and others in the alleged bribery scandal. The chargesheet had alleged that the Canadian company was wrongfully given contracts for renovation of three power projects in 1997 when Vijayan was the electricity minister of Kerala.

But Gillian MacCormack, SNC-Lavalin vice-president for global public relations, had denied these charges, saying, "We have done nothing wrong since the beginning of the project.''

However, the company reported a fall in revenue during the six-month period, raking in $3.1 billion compared to $3.5 billion for the same six-month period last year.

"We achieved good results in the second quarter of 2009, despite a disappointing performance in the Chemicals & Petroleum segment; our backlog increased and our year-to-date results are in line with our expected net income growth for 2009,'' Pierre Duhaime, president and CEO, said in a statement at the weekend.

"We continue to expect a net income growth of 7% to 12% in 2009, in line with our long-term financial objective,'' he said.

Just last month, SNC-Lavalin had won one of the largest contracts of $508 million to build a brand-new city in the north African nation Algeria.