The arrest of a former SNC-Lavalin executive in Switzerland has led to a chorus of investors and insiders demanding a broader investigation into the company’s construction operations.

CBC News first reported Sunday that Riadh Ben Aissa had been arrested in Switzerland. The dual Canadian-Tunisian citizen is accused of fraud, corruption and money laundering tied to SNC-Lavalin's operations in North Africa.

Billionaire Stephen Jarislowsky, who owns 14 per cent of the company's stock, said Monday that the board of directors should have been keeping a closer eye on the company's executives, especially in light of recent findings of internal irregularities.

Jarislowsky called the oversight by the board “inadequate” and said they should have been better “mentors.”

“They received a really rude shock when the news came out because it was clear that they had accepted this situation as the result of many, many years of working in that fashion,” Jarislowsky said.

Riadh Ben Aissa was executive vice-president of SNC-Lavalin's construction arm until he and another company executive were forced to resign from the company in February. (SNC-Lavalin)

Ben Aissa's success with large projects in North Africa, and his ties to the ruling families in that part of the world, led to him being named executive vice-president in charge of construction in 2007.

He resigned from the company in February of this year under a cloud of suspicion that he was connected to the plight of Cyndy Vanier, the Canadian consultant jailed in Mexico for allegedly masterminding a plot to smuggle a friend of Ben Aissa’s — Saadi Gadhafi, the son of Libya’s former dictator Moammar Gadhafi — and his family to Mexico.

Accusations of rogue payments

Since his resignation, the Montreal-based engineering and construction firm has said that Ben Aissa was involved in $56 million in rogue payments to unknown agents — revelations that led to the retirement of SNC-Lavalin chief executive Pierre Duhaime.

Duhaime has not commented publicly since he announced his retirement in late March.

“If the Swiss or Canadian justice system determines that Mr. Ben Aissa has committed actions that are illegal in any way, we believe he should be held accountable,” SNC spokeswoman Leslie Quinton said Monday.

The RCMP showed up with a search warrant at SNC-Lavalin headquarters on April 13, at the behest of inquiries from Swiss police.

'It’s ridiculous that they’re just looking at Ben Aissa.'—SNC-Lavalin employee who requested anonymity

Insiders within the company, who asked for anonymity for fear of repercussions to their jobs, fear there could be a potential political chill on any investigation given the ties of some members of the board — including chairman Gwyn Morgan, a former Tory fundraiser, and Conservative Senator Hugh Segal.

The insiders are also calling for a broader probe, involving other employees.

“It’s ridiculous that they’re just looking at Ben Aissa,” said one company employee. Although Ben Aissa had the reputation of operating like a lone wolf, someone had to have intimate knowledge of his dealings, the employee said.

Insiders are also questioning the $4.9-million severance payment handed to retiring CEO Pierre Duhaime — who SNC-Lavalin says secretly approved some of the $56 million in improper payments discovered by company audits — despite the objections of the company's chief financial officer.

SNC-Lavalin says it has handed those company audits over to police for investigation.

Representatives for Ben Aissa have refused to comment on his arrest, and the allegations against him in Switzerland have not been tested in court.

Anger at Canadian authorities

Other insiders and former employees are irked that it took an outside authority like Swiss prosecutors to initiate an investigation.

The slow response by Canadian authorities is “not surprising given the track record of the RCMP in investigating corporate crime or stock market crime in Canada," said Bruce Livesey, author of a new book on corporate crime called Thieves of Bay Street.

“They generally are pretty abysmal at it.”

The reasons, he said, include the dysfunctional nature of the RCMP, their lack of expertise in complicated commercial crimes, and the federal government’s “lack of political will to prosecute or investigate corporate crime in Canada.”

As an example, Livesey cited the Conrad Black case, where it took American authorities to put him behind bars, and not the RCMP.

“Foreign prosecutors generally view Canada as a joke, as an international joke, or just a joke in terms of prosecuting white-collar or corporate crime,” said Livesey. “They see a tremendous lack of will or desire to do it — and often to a puzzling degree.”

Vanier's parents on the arrest

Betty (left) and John MacDonald speak to CBC News about their daughter, Ontario resident Cyndy Vanier, who is in jail in Mexico. (CBC)

Meanwhile the parents of Cyndy Vanier don’t know what to make of the arrest of the man who hired their daughter, who remains in a Mexican jail.

“I think that a lot more is going to come out,” John McDonald said.

If there was a plan to move Saadi Gadhafi to Mexico, “it was totally controlled by SNC-Lavalin, if anybody, and I still don’t believe [Cyndy] had anything to do with it," he told CBC News.

His wife, Betty, said she's "really happy" that Ben Aissa's been arrested.

"I think it's about time somebody else started having to pay a price for this horrible situation," she said.

“Cyndy's been in prison almost six months now, and the Lavalin people just seem to be taking a back seat, not speaking up … and she's the only one being punished right now.”

Send tips to dave.seglins@cbc.ca and john.nicol@cbc.ca