Rolls-Royce provides graft file to fraud team

It relates to allegations of corruption involving intermediaries in China and Indonesia

PUBLISHED : Friday, 07 December, 2012, 12:00am
UPDATED : Friday, 07 December, 2012, 3:23am

Rolls-Royce has passed a file about malpractice allegations in China and Indonesia to Britain's Serious Fraud Office, the firm confirmed yesterday.

This followed an internal probe by lawyers acting on behalf of the aircraft engine and marine equipment maker. The investigation was made at the request of the SFO into alleged irregularities in China and Indonesia.

The investigation also uncovered problems in other countries that Rolls-Royce is unwilling to identify.

A company spokesman declined to comment on whether the business activities in question in China also included those in Hong Kong and Taiwan.

The firm said its investigations "have identified matters of concern" in China and Indonesia and other overseas markets, adding the information passed to the SFO related to "concerns about bribery and corruption involving intermediaries".

The allegations relate to business carried out in the past and do not cover recent activities.

The firm's ethics committee, set up in 2008, strengthened its policies on the use of commercial intermediaries in 2010, before the introduction of the UK Bribery Act last year.

The company declined to comment which parts of its power business were affected and if the allegations focused on the aircraft or marine divisions.

Rolls-Royce also does not give a country or regional breakdown of revenues, but China has been a key market for several years.

In 2007, China was Rolls-Royce's biggest global market for commercial merchant ships, with the company supplying steering gear and deck machinery for mainland-built vessels.

It subsequently strengthened its links in China with a collaborative venture to develop new ship designs as well as winning orders for machinery and propulsion systems.

There is no indication when or if the SFO will decide to take any action, although it could prosecute individuals or Rolls-Royce.