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Former CEO of SNC Lavalin arrested

MONTREAL (AP) -- The former chief executive of Canadian engineering and construction giant SNC-Lavalin has been arrested and charged with fraud, authorities said Wednesday.

Quebec's anti-corruption squad said Pierre Duhaime was taken from his home by police in connection with alleged fraud involving a Montreal hospital.

The arrest warrant alleges that Duhaime and Riasdh Ben Aissa, SNC's former head of construction, committed conspiracy to commit fraud and uttered false documents in connection with a contract pertaining to the multibillion-dollar McGill University Health Centre.

The Montreal-based company, one of the world's largest engineering and construction companies, said earlier this year that it informed police about the results of an internal investigation into $56 million worth of payments that resulted in the resignation of its CEO.

Duhaime received a $5-million payout after he stepped down as SNC-Lavalin's CEO last March.

He was "relieved" of his duties after an independent review conducted by the company discovered he signed off on the $56-million worth of payments to undisclosed agents, breaching the company's code of ethics. His departure was classified as a retirement.

SNC-Lavalin they were informed of the arrest but said they are not aware of the specifics of any of the charges.

"We have voluntarily turned over information that we have to local and other authorities for them to take any actions that they may consider appropriate," the company said in a statement. "We are unequivocal that no unethical behavior or illegal acts must ever be tolerated. We believe that anyone found to have committed any wrongdoing should be brought to justice."

International proceedings are also ongoing against Ben Aissa, who was already arrested in Switzerland on fraud, money laundering and corruption charges.

Shares of SNC-Lavalin closed down 2.3 percent in trading on the Toronto Stock Exchange on Wednesday. The shares have fallen nearly 29 per cent in the past year.

In Quebec, the anti-corruption unit was created in the wake of other scandals surrounding collusion in the construction industry and its links to political parties and organized crime.

Since its creation last year it has arrested numerous construction-industry players as well as people tied to municipal political parties.