Deirdre McMurdy

By the time it's acknowledged that $35 million is "missing," the financial results report is delayed and the board of directors launches an investigation.

By the time the senior management team retains independent legal counsel to represent it.

By the time an exceptionally close corporate relationship with a dead Libyan dictator is finally exposed.

By the time the time a Canadian diplomat's deportment is "under review" and the federal Minister of Foreign Affairs and International Trade is involved.

By the time all of this oozes into the media and into wide spread public awareness, you've got an epic — and embarrassing — mess on your hands. A mess called SNC-Lavalin.

It goes even further than that, given the Montreal-based, international engineering and construction conglomerate's diving stock price and its two largest shareholders: Jarislowsky Fraser, one of Canada's biggest pension fund managers, and Quebec's provincial public sector pension fund, the Caisse de Depot et Placements.

SNC-Lavalin's "special" relationship with the family of Libyan strongman Moammar Gadhafi, has been steadily seeping into the public eye since his death last year at the hands of insurgents. Although the firm tried to distance itself from the controversy and a few executives were purged to reinforce that distance, these actions only seemed to reinforce negative perceptions of its actions and ethics.

Although the scope of the scandal is deeply impressive, it shouldn't be a total bolt from the blue: in early September, the RCMP raided SNC-Lavalin's offices as part of an investigation into its involvement with a corrupt bidding process for the construction of a $1.2-billion World bank-funded bridge in Bangladesh.

For investors who are looking for leverage in emerging markets and the big-ticket infrastructure projects that go along with that development, shares in SNC-Lavalin have a definite appeal. And there's little doubt that the market — as it almost always does — is over-reacting to the negative news about the company.

But there are some real cautionary lessons to be learned from this whole sordid saga. Lessons that should be borne in mind by anyone who is considering investment in companies that operate on a global scale.

    Lesson #1
    Understand that Canada is a world-class laggard when it comes to enforcing any rules around corruption and bribery by companies operating outside the country.

    Last March, Canada was publicly taken to task for this weakness in a report from the Organisation for Economic Co-operation and Development (OECD). An even sharper rap came last May when Transparency International ranked Canada as the worst of the G-7 industrialized nations when it comes to enforcing international ethical standards on bribery and corruption.

    Although the Corruption of Foreign Public Officials Act has been on the books since 1998, it's only been dusted off twice — both times for Alberta-based companies. In 2005, HydroKleen was fined $25,000 for bribing a U.S. immigration official and in August 2011, Niko Resources was fined $9.5 million and sentenced to three years of monitoring for bribery related to operations in Bangladesh.

    These are the sorts of penalties that are more likely to be considered the cost of doing business rather than deterrents of future transgression.