Ali comes up empty in challenge of contract bidding ban

An excavation company prevented from bidding on public contracts because of a history with phoney invoices has failed to convince a Superior Court judge the decision is unreasonable.

Judge Steve Reimnitz did not buy Ali Excavation’s argument that settling its account with Revenue Quebec was justification for rejecting a 2014 ruling by the Autorité des marchés financiers (AMF), which denied the company’s application to bid on public jobs.

The AMF refusal centred on Ali Excavation’s use of eight shell companies that supplied false invoices 36 times between 2003 to 2007 in order to appropriate money and avoid taxes (and eventually led to a reassessment by Revenue Quebec).

The AMF said it wasn’t convinced the company’s restructuring and new governance practices showed a real change in corporate values.

Judge Reimnitz said the AMF has been empowered to accord or deny companies authorization to deal with the state and it did not exceed its jurisdiction or show bad faith in taking the position it did with Ali Excavation.

“The fact Ali paid what was due (in taxes) does not prevent a third party not involved in this decision to consider the facts on which it was based and the fact it was tied to these reputed false invoices,” he said.

Ali did not deny the existence of false invoices, a factor the AMF understandably considered when it made its ruling, Judge Reimnitz said. “An enterprise that’s received an initial refusal has to clearly answer what’s being reproached. If it doesn’t, it’s not illegal for the decision-maker to make an inference.”

An enterprise that’s received an initial refusal has to clearly answer what’s being reproached.

JUDGE STEVE REIMNITZ