Rolls-Royce agrees £671m payment to settle corruption claims

    Rolls-Royce agrees £671m payment to settle corruption claims

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    Rolls-Royce has agreed to pay £671 million to British, US and Brazilian authorities to settle bribery and corruption claims.

    The engine maker said it has in principle reached a deferred prosecution agreement (DPA) with the UK’s Serious Fraud Office (SFO) and the US Department of Justice (DoJ), and a leniency agreement with Brazil’s Ministerio Publico Federal (MPF).

    The agreements relate to bribery and corruption scandals involving intermediaries in overseas markets such as Indonesia and China.

    Undated handout file photo issued by Rolls-Royce of work being carried out on one of their Trent XWB engines.

    The company first passed information to the SFO in 2012 after facing “allegations of malpractice” in the two countries, after which the fraud squad launched a formal investigation.

    Officials for the firm said at the time its own investigations had found “matters of concern” in additional overseas markets.

    Rolls-Royce said the sums were “voluntary agreements” which result in the suspension of a prosecution, provided the company fulfils certain requirements, including the payment of a financial penalty.

    The firm has agreed to make payments to the DoJ totalling 169 million US dollars (£140 million) and to the MPF totalling 25.6 million US dollars (£21.2 million).

    Under the terms of the DPA with the SFO, Rolls-Royce will pay £497 million plus interest over five years, plus a payment in respect of the SFO’s costs.

    Rolls-Royce will pay £293 million in the first year of all three agreements.

    The firm said it has co-operated fully with the authorities and will continue to do so.

    Rolls-Royce will report full-year results in February, when it will update the market on the implications of the settlements to the balance sheet.

    The firm said early indications show that the group has had a “good finish” to the year with both profit and, in particular, cash expected to come in ahead of expectations.

    In a statement, the SFO confirmed the agreement had been reached in principle with the company and said approval would be sought at a public hearing scheduled for 10am at the Royal Courts of Justice on Tuesday.

    Meanwhile, anti-corruption group Transparency International UK executive director Robert Barrington said news of the agreements “should send shivers down the spines of corrupt companies and individuals”.

    He said: “In order to serve as a proper deterrent for companies who think it is acceptable to do business with bribery, those involved with or who sanctioned bribery must be prosecuted individually.”

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