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Rolls-Royce apologises after £671m bribery settlement Rolls-Royce apologises after £671m bribery settlement
(35 minutes later)
A UK court has approved a £671m agreement between Rolls-Royce and UK and US authorities to settle bribery and corruption cases. British engineering giant Rolls-Royce will pay a £671m penalty to settle corruption cases with UK and US authorities, a court has ruled.
The aerospace firm will pay £497m plus costs to the Serious Fraud Office (SFO), which started investigating claims in 2012 of wrongdoing overseas. The aerospace firm will pay £497m plus costs to the UK's Serious Fraud Office (SFO), which conducted its biggest ever investigation into the firm.
The SFO found conspiracy to corrupt or failure to prevent bribery in China, India, Thailand and other markets.The SFO found conspiracy to corrupt or failure to prevent bribery in China, India, Thailand and other markets.
Rolls-Royce apologised "unreservedly" for the conduct which was uncovered. The firm apologised "unreservedly" for cases spanning nearly 25 years.
The statement of facts published by the SFO revealed 12 counts of conspiracy to corrupt or failure to prevent bribery in seven countries - Indonesia, Thailand, India, Russia, Nigeria, China and Malaysia. The investigation revealed 12 counts of conspiracy to corrupt or failure to prevent bribery in seven countries - Indonesia, Thailand, India, Russia, Nigeria, China and Malaysia, according to the SFO.
Rolls-Royce said it would also pay $170m (£141m) to the US Justice Department. Rolls-Royce said it would also pay $170m (£141m) to the US Justice Department, and a further $26m (£21.5m) to Brazilian regulators.
A further settlement would see it pay $26m (£21.5m) to Brazilian regulators, it added. Described by the judge as "a jewel in the UK's industrial crown", Rolls-Royce makes engines for military and civil planes, as well as for trains, ships, nuclear submarines and power stations.
Rolls-Royce's shares finished nearly 4.5% higher on the news of the settlements and the company's announcement that its 2016 profits would beat expectations. The firm's shares finished nearly 4.5% higher on the news of the settlements and the company's announcement that its 2016 profits would beat expectations.
One of the UK's biggest manufacturing exporters, Rolls-Royce makes engines for military and civil planes, as well as for trains, ships, nuclear submarines and power stations.
'Intermediaries''Intermediaries'
The agreement between the SFO and Rolls Royce is known as a deferred prosecution agreement (DPA). The agreement between the SFO and Rolls Royce, approved on Tuesday in a UK court, is known as a deferred prosecution agreement (DPA).
It is only the third such agreement that the SFO has struck since they were first introduced into UK law in 2014.It is only the third such agreement that the SFO has struck since they were first introduced into UK law in 2014.
They allow organisations to pay huge penalties, but avoid prosecution, if they freely confess to economic crimes such as fraud or bribery.They allow organisations to pay huge penalties, but avoid prosecution, if they freely confess to economic crimes such as fraud or bribery.
The wrongdoing involved Rolls-Royce's "intermediaries", which are local companies that handle sales, distribution, repair and maintenance in countries where the British firm does not have enough people on the ground.The wrongdoing involved Rolls-Royce's "intermediaries", which are local companies that handle sales, distribution, repair and maintenance in countries where the British firm does not have enough people on the ground.
The cases of corruption or bribery, some of which date back nearly 30 years, included: The cases of suspected corruption or bribery detailed by the SFO included:
'Zero tolerance''Zero tolerance'
In its statement, Rolls-Royce chief executive Warren East said: "The behaviour uncovered in the course of the investigations by the Serious Fraud Office and other authorities is completely unacceptable and we apologise unreservedly for it.In its statement, Rolls-Royce chief executive Warren East said: "The behaviour uncovered in the course of the investigations by the Serious Fraud Office and other authorities is completely unacceptable and we apologise unreservedly for it.
"The past practices that have been uncovered do not reflect the manner in which Rolls-Royce does business today."The past practices that have been uncovered do not reflect the manner in which Rolls-Royce does business today.
"We now conduct ourselves in a fundamentally different way. We have zero tolerance of business misconduct of any sort," he added."We now conduct ourselves in a fundamentally different way. We have zero tolerance of business misconduct of any sort," he added.
The company's lawyer, David Perry, told the court that it had undergone a "fundamental change" since the investigations began, overhauling systems, training, governance and ethics strategies.The company's lawyer, David Perry, told the court that it had undergone a "fundamental change" since the investigations began, overhauling systems, training, governance and ethics strategies.
SFO director David Green said the £13m probe into Rolls-Royce was the biggest single investigation the office had carried out.SFO director David Green said the £13m probe into Rolls-Royce was the biggest single investigation the office had carried out.
"It allows Rolls-Royce to draw a line under conduct spanning seven countries, three decades and three sectors of its business," he said."It allows Rolls-Royce to draw a line under conduct spanning seven countries, three decades and three sectors of its business," he said.
"I think it shows very clearly that the SFO has teeth and that the SFO will not go away and that on a positive side from a company's point of view it shows that co-operation, genuine co-operation with a SFO investigation pays," he told the BBC."I think it shows very clearly that the SFO has teeth and that the SFO will not go away and that on a positive side from a company's point of view it shows that co-operation, genuine co-operation with a SFO investigation pays," he told the BBC.