A $56 million missing payment mystery toppled SNC-Lavalin’s CEO as the company handed the results of a month-long internal investigation over to legal authorities.

Chief executive officer Pierre Duhaime is the third executive to exit the embattled engineering giant since last month.

Duhaime resigned Monday, following revelations he breached the company’s code of ethics for approving the payments without authorization after the CFO had rejected them.

That’s about the only straightforward part of the report into the questionable payments, which raises more questions than it answers.

It reveals payments to contracts that didn’t exist, mysterious agents whose identity “is without substance,” and staffers using emails and password-protected devices that the company couldn’t access.

Gwyn Morgan, chair of SNC’s board of directors, insisted the payments did not go to operations in Libya.

But by the company’s own admission, the report is inconclusive.

“They state there’s no evidence to suggest it was related to their projects in Libya. Later they state they can’t determine who actually received the money because the recipients appear to be fictitious,” said Richard Powers, business law and ethics professor at the University of Toronto’s Rotman School of Management.

“It’s hard to know how they can say that.”

Yet investors bet that the worst was over for the firm, sending the company’s stock 5 per cent higher in trading on the Toronto Stock Exchange.

SNC-Lavalin is one of Canada’s most international companies, with construction, infrastructure and engineering projects in 100 countries around the world.

Morgan acknowledged that the incident tarnishes the company’s reputation, but he urged perspective given the overall size of the company, which had more than $7 billion (U.S.) in revenue last year.

The company earned $76 million in its latest quarter.

SNC also assured investors and analysts on a conference call that it has called in the authorities.

“The company is in the process of contacting and will be passing on any information we have with regards to the payments – basically the inconclusive results of our investigation – to the relevant authorities,” Morgan said.

Based on the results of the investigation, Morgan said the board doesn’t believe the money was used for bribes or wound up in Libya. But he acknowledged it wasn’t “able to really determine the use of those payments.”

“We did our best to find out everything we could about the course of those payments and haven’t been able to do so. At this point, there is no further action we can take,” he said.

The company said improper payments are a result of “management override, flawed design or ineffective enforcement of controls” in relation to hiring agents for two of its projects.

SNC said the company’s CFO refused to approve the payments, but Duhaime stepped in to allow the payments to be made.

“The CEO’s authorization of these payments did not comply with the Agents Policy and therefore was in breach of the Code (of Ethics),” the company’s internal review found.

Using agents is a normal part of doing business by construction firms, especially in foreign countries. They are contracted to arrange permits and help execute projects.

But, Morgan said the size of these payments was unusual. He said the three-year average payments to the agents was around $700,000.

The company did not disclose which projects were involved in the investigation — referring to them only as “Projects A and B.”

The internal document shows that payments on Project B were made via Tunisia.

Past company filings show that Duhaime, who spent 23 years with SNC, earned a base salary of $800,000 in 2010, along with a bonus of $1.3 million. He also has shares and stock options worth about $1.46 million.

Among the findings of the report:

• Third parties have been unresponsive or reluctant to provide information regarding their operations or their clients’ affairs.

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• Some former employees have conducted company affairs using non-corporate email addresses or had password protected devices to which the company does not have access.

• The interpretation of improper documentation cannot be definitive…because it is known to be inaccurate.

Last month, the company’s board launched an investigation over the circumstances surrounding $35 million in payments, which had previously been thought to possibly relate to its involvement in Libya. The ties sparked criticism that it was excessively cosy with the former Gadhafi regime.

Around that time it also parted ways with executive vice-president of construction, Riadh Ben Aissa and vice-president finance Stephane Roy, saying that the conduct of its employees had recently been questioned.

In a press release Monday, the company said Aissa —who is apparently not co-operating with the investigation — authorized the signing of agreements for the projects, which were improperly documented.

It said Aissa “is believed to have significant knowledge about most of the investigated transactions, but has not been met despite a request to his counsel.”

It added that Roy may also have knowledge, but he has not been interviewed since prior to his dismissal in February.

“The independent review has found not direct and conclusive evidence establishing the nature of the services or actions undertaken by, or the true identity of, the presumed agent,” the report reads.

“From the business intelligence gathered, the named counterparty appears to be without substance, and the true principal involved in the transaction does not appear to be an individual named on the public registers of the counterparty.”

From what has come to light so far, observers say the company is handling the situation as well as it can.

Morgan “has a stellar reputation in the business community. I would expect nothing less than him being as transparent as possible,” Powers said.

“These are the types of things that really test a company’s mettle. At this stage, it’s a bit early to pronounce a verdict but coming out, taking full responsibility and taking action is all they can do at this stage until they know further information.”

The company said that vice chair Ian Bourne will also assume the function of interim CEO until a new chief executive is hired to replace Duhaime.

Earlier this month, a class-action lawsuit was filed on behalf of shareholders who acquired its securities between March 2009 and February 2012.

The suit is seeking $250 million in damages from the Montreal-based company in relation to the millions in mysterious payments.

SNC denies all liability in respect of the claims alleged in the proposed class-action.

WITH FILES FROM STAR WIRE SERVICES

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