Rolls-Royce in fresh probe over Indian orders

Rolls-Royce: Facign fresh corruption allegations. Picture: Getty
Rolls-Royce: Facign fresh corruption allegations. Picture: Getty
Share this article
Have your say

AEROSPACE engines maker Rolls-Royce is facing fresh corruption allegations after India’s defence ministry ordered an inquiry into orders worth at least $1.2 billion (£717 million) from state-run Hindustan Aeronautics (HAL).

A ministry official said the country’s Central Bureau of Investigation will look into more than $80m of alleged payments in a deal that was signed in 2011.

Defence minister AK Antony referred the case to investigators after being told by HAL that Rolls-Royce had disclosed its use of outside consultants receiving a percentage commission. Such arrangements could violate India’s procurement rules, as they might be used to channel payments to secure lucrative government contracts.

A Rolls-Royce spokesman said: “We await clarification from the authorities in India. We have made clear that we will co-operate with the regulators and have been explicit that we will not tolerate misconduct of any sort.”

In December, the UK’s Serious Fraud Office launched a formal investigation into Rolls-Royce – the world’s second-largest maker of aircraft engines behind General Electric – over concerns about possible bribery and corruption in China and Indonesia.

The group, which employs more than 21,300 people across the UK, last month reported a 23 per cent increase in underlying pre-tax profits to almost £1.8bn for 2013. However, it warned that profits were unlikely to grow this year amid spending cuts in Europe and the US.