Officials at the Serious Fraud Office (SFO) have launched a formal investigation into Rolls-Royce over concerns about possible bribery and corruption in two of its overseas markets.
The aerospace and defence group said last December it had passed information to the SFO relating to bribery and corruption involving intermediaries in China and Indonesia. Some of the allegations date back more than ten years. In a statement to the London stock market yesterday, Rolls said: “Further to our announcement of 6 December 2012… we have been informed by the Serious Fraud Office that it has now commenced a formal investigation into these matters.”
The intermediaries are local companies that handle sales, distribution, repair and maintenance in countries where the British group does not have sufficient staff on the ground.
In December 2012, when Rolls began talks with the SFO, it stressed that it had been strengthening its internal compliance procedure since 2008.
Liberum analyst Ben Bourne said of yesterday’s announcement: “This is just the next step in the process.”
Last month, Tommy Suharto, the youngest son of Indonesia’s late president, denied allegations that he received bribes from Rolls, which employs more than 40,000 people in some 50 countries. Allegations of corruption are not new to the defence and aerospace industry, in which companies commonly use individuals or companies as intermediaries in countries where they do not have a large presence.
BAE Systems was fined some £286 mllion by Britain and the US in 2010, following long-running corruption investigations at home and abroad into defence deals in a number of countries including Saudi Arabia.