Questionable management of SNC by
Guy Saint–Pierre and Jean-Paul Gourdeau – Allenvest Group and multiple-vote
employee shareholders (15 votes) who on layoff were then reduced to one vote
each. SNC forced to implement “sunset” arrangement abolishing this with 5 year
notice period.
Firstly,
See this
article in the "Globe and Mail" on April 3rd 1992
The SNC executives were ostensibly trying to – quote - reinforce management control – unquote - at a, quote - critical juncture – unquote - in SNC s history, at a time when control of SNC was effectively in the hands of about 520 employees who had multiple vote Class B shares that were worth 15 votes PER SHARE . They wanted to issue more such shares to ex-Lavalin Inc. people following the 1991 take-over of Lavalin Inc. – whereas non-employee shares (Class A shares), then numbering about 13.5 mllion, were worth only one vote each.
At the same time, hundreds of employees had recently been laid off; some of them, who were shareholders, were forced to convert their Class B multiple vote shares to Class A single-vote shares. This meant that their influence on events at SNC - as a direct consequence of being laid off - was suddenly reduced by a factor of 15. In other words SNC seemed to be saying to them, in effect: we have laid you off, so what you say does not really count any more.
At the same
time, employees had to be recommended by their peers and bosses before they
could become shareholders.
Further,
the same 12 people who were Directors of SNC were also the Directors of The SNC Employee-Shareholders Corp. Inc.,
the company that held all the Class B multiple-voting shares. Of these 12 Directors , 10 were outside
Directors; the two insiders were Guy Saint-Pierre
and Jean –Paul Gourdeau.
Now,
See this
article in the "Financial Post" on Wednesday, April 29th 1992
They were forced by the Toronto-based investment brokerage firm, Allenvest Group Ltd., to change their plans, referred to in the previous article.
Allenvest Group Inc. were concerned about the rights of shareholders.