One of Canada’s most valuable engineering companies is set to undergo an auction after a judge issued a decision Monday voiding an order that would have allowed the firm to stay in business under a much narrower definition of a Chinese-controlled entity.
SNC-Lavalin Group Ltd. has already been told by authorities to sell its stake in the company Orion Holdings — the company’s answer to Blackwater, the controversial private security firm — and to stop operating the economic consulting and firm Dentons, a major legal and lobbying entity located in Montreal, Canada. The remaining options include selling off everything or going bankrupt.
The company’s owner, whose name has never been made public, owns the larger 57 percent of the company’s shares, according to court filings. Chinese companies have been barred from purchasing minority stakes in Canadian companies over concerns of espionage. But the court was told earlier this year that some executives from the controlling shareholder, controlling investor Sunac China Holdings Ltd., had controlled some assets. It is unclear why the ownership structure was not detailed in the original order.
SNC-Lavalin lawyers argued that the order was invalid because it had been made outside the traditional notice process and should have been subject to appeals. The court also weighed at issue the secrecy of the large majority of its shares, arguing that it was unnecessary to disclose them.
The ruling does not specify whether Sunac China remains the majority owner, meaning it could still play a role in the ongoing sale process. Sunac’s founder, Sun Hongbin, had previously bought a piece of SNC-Lavalin’s support services unit while it was financially strapped.
Read the full story at Quartz.
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