Rolls Royce pays 671mil pounds penalty in bribery case

Rolls Royce pays 671mil pounds penalty in bribery case

London ,Jan 17:Rolls-Royce has agreed to pay £671m to settle bribery and corruption cases with UK and US authorities.

The aerospace firm is set to pay £497m plus costs to the Serious Fraud Office (SFO), which started investigating claims in 2012 of wrongdoing overseas.

At the time, the SFO asked the firm for information about possible bribery in China, Indonesia and other markets.

Rolls-Royce said it had also agreed to pay $170m (£141m) to the US Department of Justice.

A further settlement would see it pay $26m (£21.5m) to Brazilian regulators, it added.

Rolls-Royce, one of the UK’s biggest manufacturing exporters, makes engines for military and civil planes, as well as for trains, ships, nuclear submarines and power stations.

‘Intermediaries’

“These are voluntary agreements which result in the suspension of a prosecution provided that the company fulfils certain requirements, including the payment of a financial penalty,” the firm said.

It added that concerns about bribery and corruption were passed by the firm to the SFO in 2012, but it did not give further information on which countries were involved.

Some of the allegations dated back more than 10 years.

They involved Rolls-Royce’s “intermediaries”, which are local companies that handle sales, distribution, repair and maintenance in countries where the British firm does not have enough people on the ground.

The SFO confirmed it had reached a deferred prosecution agreement (DPA) with Rolls-Royce, which would be subject to approval by a court on Tuesday.

It is only the third such agreement that the SFO has struck since they were first introduced into UK law in 2014.

Hawley said: “The extent and egregious nature of the allegations against Rolls-Royce – and the fact that all indications are that it didn’t actually self-report, but this came from a whistleblower – really raise questions about whether this is being done as a convenient form for Rolls-Royce to carry on getting public contracts.”

Companies are supposed to refer themselves to investigators in order to qualify for a deferred prosecution agreement. If convicted of corruption offences, a company can be barred from bidding for public contracts unless it were able to prove it had reformed.

A relatively recent development in British law, a DPA is an arrangement under which a company can halt investigations against it for a fine. If further wrongdoing were to be committed during the duration of the agreement, the original prosecution could be reactivated.

Barrington said: “The fine is an eye-catching size, much bigger than any previous deferred prosecution agreement. Transparency International has always that the DPA must only be used when it is in the public interest, so information needs to be put into the public domain about this investigation.

“The critical part is that there must be a prosecution of individuals. There is criminality here, and we would like to see the SFO set out a timeline for those prosecutions.”

He said he was encouraged to see Brazilian, US and British regulators working together. “It will send a shiver down the spine of bribe-payers,” he said.

Sources close to the negotiations said the SFO and Rolls-Royce attended a preliminary court hearing on Monday, with a statement being issued as the markets closed.

It is understood that the Brazilian authorities have allowed Rolls-Royce to sign a leniency agreement, which is similar to a DPA.

The SFO has had at least 30 investigators in the UK focused on the multinational’s use of agents or middlemen to clinch export contracts in a number of countries across several strands of its business.

Rolls-Royce’s sprawling organisation has customers in more than 150 countries, including more than 400 airlines and leasing customers.

The Guardian and BBC’s Panorama revealed that agents have been hired in Angola, Azerbaijan, Brazil, India, China, Indonesia, Iran, Iraq, Kazakhstan, Nigeria, Saudi Arabia and South Africa.

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