Rolls-Royce could face action in bribery probe
London, December 6, 2012
Aerospace and defence group Rolls-Royce said it was in talks with Britain's Serious Fraud Office (SFO) over potential corruption involving its intermediaries overseas.
Rolls said on Thursday it was too early to predict the outcome of the investigation by the SFO, but this could include prosecution of the company and of certain individuals, adding that it would cooperate fully with the probe.
The world's second-largest maker of aircraft engines behind U.S. group General Electric, said it had passed information to the SFO relating to concerns about bribery and corruption involving intermediaries in China, Indonesia and other overseas markets, which it did not name.
"I want to make it crystal clear that neither I nor the board will tolerate improper business conduct of any sort and will take all necessary action to ensure compliance," chief executive John Rishton said in a statement.
"This is a company with exceptional prospects and I will not accept any behaviour that undermines its future success."
Shares in Rolls-Royce, which have risen 25 percent this year, opened 5.3 percent down in early trade on Thursday, valuing the group at around 16.2 billion pounds ($26 billion).
A source with knowledge of the events said the SFO had asked Rolls to investigate allegations of corruption in China and Indonesia earlier this year. Rolls hired an independent body to do this and passed the results, which identified matters of concern, to the SFO, the source added.
Aerospace and defence companies use intermediaries, which can be individuals or companies, in countries where they do not have large-scale infrastructure to support their operations. Intermediaries cover tasks from sales to coordinating maintenance and support contracts. - Reuters