Rolls-Royce investigated over Chinese bribes

Posted on 6 Dec 2012

Engine-maker Rolls-Royce has passed a legal document to the Serious Fraud Office detailing potential corrupt behaviour, including bribery, in China and Indonesia.

The Serious Fraud Office requested information on allegations of bribery and corruption in Indonesia, China and other countries at the beginning of 2012.

Internal investigations then carried out by lawyers hired by Rolls-Royce identified “matters of concern” in these markets and elsewhere.

The consequence of these disclosures will be decided by the regulatory authorities, which can prosecute individuals and the company.

Rolls-Royce have stated that matters relate to intermediaries, which operate in sales and distribution, customer service and maintenance repair and overhaul. However, fraudulent behaviour by permanent Rolls-Royce employees “couldn’t be ruled out” according to a spokesperson for the company.

Intermediaries are common in the aerospace sector and used in territories where companies don’t have enough people on the ground or infrastructure to support it.

“I want to make it crystal clear that neither I nor the Board will tolerate improper business conduct of any sort,” said John Rishton, chief executive at Rolls-Royce. He added that the company “will take all necessary action to ensure compliance.”

Rolls-Royce is appointing a senior independent figure to review all procedures and report to the non executive ethics committee on the board.

The Serious Fraud Office will determine what happens next. They are currently refusing to comment.