UPDATE 1-Bangladeshi government accuses SNC exec of bribery-report

Reuters Middle East

* Bangladesh probe alleges bribery, Globe and Mail reports

* Probe recommends prosecuting 3 former SNC executives

* President of SNC's Candu unit leaves company

* Allegations latest in mounting company scandal

* SNC shares fall 1.1 pct on TSX

TORONTO, Dec 19 (Reuters) - A unit of SNC Lavalin Group Inc

said on Wednesday that a senior executive left the

company earlier this month, which was just ahead of corruption

accusations by Bangladeshi authorities, according to a report in

the Globe and Mail newspaper.

Bangladesh's Anti-Corruption Commission has accused Kevin

Wallace, former president of SNC's Candu Energy Inc nuclear

power unit, with conspiring to bribe government officials, the

newspaper said, citing a commission report.

Wallace, previously a project manager at SNC overseeing

mining and industry projects, resigned from the Montreal-based

company in early December.

In a brief press release, Candu said on Dec. 10 that Wallace

had left the company and an acting president would fill his

position until the board of directors appointed a new president.

SNC said on Wednesday that it has not received a copy of the

Bangladesh report and learned of the investigation through the

media. The company also said it would not comment on personnel

files of former employees, or their reasons for leaving the


Attempts to reach Wallace were unsuccessful.

The report is the latest development in a mounting

corruption scandal at SNC. Earlier this month, the company said

it would suspend payments to its former chief executive,

following his arrest on fraud charges by Quebec police.

Pierre Duhaime left SNC in March after an internal probe

found that he had authorized $56 million in company payments to

unknown agents on projects that did not exist.

Quebec's anti-corruption squad said in November that SNC's

former head of construction, Riadh Ben Aissa, faced the same

charges as Duhaime.

Ben Aissa was arrested this spring in Switzerland. According

to media reports, Swiss police are investigating $139 million in

payments to a Swiss bank account tied to contracts in Libya.

The Bangladesh probe is related to a bridge project, for

which the World Bank withdrew a $1.2 billion line of credit in

June, saying it had credible evidence of a high-level corruption

conspiracy among Bangladeshi government officials.

Two former executives at SNC, which had bid to supervise the

contractor on the project, appeared in a Toronto court in July,

accused of bribing officials in Bangladesh. Ramesh Shah and

Mohammed Ismail were arrested by the Royal Canadian Mounted

Police in February following a 2011 raid on SNC's office in

Oakville, outside Toronto.

The Bangladesh anti-corruption report recommends the

prosecution of several Bangladeshi officials, as well as

Wallace, Shah and Ismail, the Globe and Mail reported.

Shares of SNC dropped 1.1 percent, or 45 Canadian cents, to

C$40.61 ($41.15) on the Toronto Stock Exchange at mid-session on


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