Rolls-Royce on Tuesday said it “apologised unreservedly” for corrupt conduct uncovered in what the UK Serious Fraud Office declared was its largest ever investigation.

Senior judge Sir Brian Leveson said in London’s High Court he would approve a deferred prosecution agreement between Rolls-Royce and the UK Serious Fraud Office, under which the engineering group will pay £497.2m — a record British fine for criminal conduct by a company.

The settlement to resolve wide-ranging allegations of bribery and corruption against Rolls-Royce also involves the UK company agreeing to pay $170m to the US Department of Justice and $25.6m to Brazil’s Ministerio Publico Federal.

Some of the alleged wrongdoing by Rolls-Royce focuses on bribes paid to intermediaries who were used to try and secure contracts to sell the company’s jet engines to airlines in emerging markets.

Sir Edward Garnier, lawyer for the SFO, said the agency’s investigation had uncovered offences that had caused “substantial harm to the integrity of the market”.

He added that the wrongdoing included “substantial sums being made available to fund bribery”, and involved “senior Rolls-Royce employees”, while the contracts won as a result of corrupt activities had resulted in gross profits for the company of more than £250m.

It is important to emphasise that Rolls-Royce has undergone a fundamental change since the occurrence of the conduct in question

Richard Whittam QC, also a lawyer for the SFO, said Rolls-Royce had been charged with 12 counts of conspiracy to corrupt and failure to prevent bribery in the operations of the group’s civil and defence aerospace divisions, which make jet engines, as well as its energy unit.

The company had paid bribes to a string of middlemen, including $2.25m and a Rolls- Royce luxury car for the sale of its Trent 700 jet engines to Garuda, Indonesia’s national airline, added Mr Whittam.

Rolls-Royce had also falsified documents between 2005 and 2009 to conceal commissions paid to intermediaries in India in relation to a defence contract, where such activities were banned, he said.

The UK group’s energy unit had paid off an official working for Gazprom, the Russian state-controlled energy company, between 2008 and 2009 in order to win a contract to supply equipment for a liquefied natural gas project, added Mr Whittam.

Rolls-Royce had also failed to prevent bribery in relation to the extension of a £5m cash credit to China Eastern Airlines for the purchase of the company’s Trent 700 engines — as well as arranging for the Chinese carrier’s employees to attend a two-week MBA course complete with four-star accommodation and “lavish extracurricular activities”, said Mr Whittam.

David Perry QC, lawyer for Rolls-Royce, said the behaviour set out by the prosecutors was “unacceptable and under no circumstances would it be condoned” by new management at the company.

“Rolls-Royce apologises unreservedly for the conduct which has been uncovered,” he added.

“It is important to emphasise that Rolls-Royce has undergone a fundamental change since the occurrence of the conduct in question.

“The company and its board is ultimately dedicated to ensuring that the company follows the highest standards of external business conduct.”

Sir Edward said it was important to note Rolls-Royce’s management was now a “different animal”, and there had been a “high level of co-operation” from the company after the SFO began its investigation following the posting by a whistleblower of a first set of allegations about the group’s activities.

“Once the co-operation began it was on the highest level,” he added.



Source link