Rolls-Royce to pay over $800 mn to settle bribery, corruption cases
17 Jan 2017
Rolls-Royce has agreed in principle to settle bribery and corruption cases with authorities in the US, UK and Brazil and pay the equivalent of over $800 million in the three countries, the company said in a news release yesterday.
Rolls-Royce said it had cooperated with authorities in the cases, which involved bribery and corruption by intermediaries in overseas markets, passing on its concerns about them to the UK's Serious Fraud Office (SFO) from 2012 onwards.
A number of cases dated back a decade, the BBC said in a report, noting that they involved local companies that dealt with sales, distribution, repair and maintenance in countries where the UK company had few representatives on the ground.
Rolls-Royce said it had reached a deferred prosecution agreement (DPA) with the US Department of Justice, a leniency agreement with Brazil's Ministerio Publico Federal and a DPA with the UK's Serious Fraud Office (SFO), which was the subject of a preliminary court ruling yesterday.
The UK's proposed DPA was pending a judicial approval, and Rolls-Royce would appear in court today to finalise the agreement, which is voluntary. The company would be spared prosecution as long as it fulfilled the agreed-upon terms and financial penalty.
Rolls-Royce has agreed to pay about $807 million to resolve US and UK investigations into allegations its representatives bribed foreign officials to win business.
The company said it would pay the SFO £497.25 million plus interest, and the US Department of Justice about $170 million. The UK penalty is the biggest-ever sanction issued against a company by the UK.
''It's a very large fine which we didn't see coming; it's something of a bolt from the blue,'' said Nick Cunningham, an aerospace and defence equity analyst at Agency Partners in London, Bloomberg reported. ''Usually these settlements are relatively moderate compared to the size of the company.''
