Rolls-Royce to pay £671 million to end bribery claims

Rolls-Royce (LON:RR) shares rose up 6.9 percent on Tuesday, following the announcement that the aerospace firm is to pay £671 million in penalties to settle allegations of bribery and corruption.

The fine is the largest ever given to a UK company for criminal conduct and was imposed after claims Rolls-Royce paid bribes to land export contracts in several countries including Brazil, India and China.

The policy director of Corruption Watch, Susan Hawley, described the settlement as “proof the UK is not willing to prosecute a large, politically connected company”.

In the deal announced on Monday, Rolls-Royce said that it will pay $169 million (£140m) in penalties to the US Department of Justice, $25 million to the Brazilian authorities and £497 million to the UK Serious Fraud Office (SFO).

Robert Barrington, the executive director of Transparency International, said, “The fine is an eye-catching size, much bigger than any previous deferred prosecution agreement. Transparency International has always that the DPA must only be used when it is in the public interest, so information needs to be put into the public domain about this investigation.

“The critical part is that there must be a prosecution of individuals. There is criminality here, and we would like to see the SFO set out a timeline for those prosecutions.”

Whilst this fine means the company as a whole can no longer be prosecuted, individual executives are still at risk. Barrington said in a statement that “there must be a prosecution of individuals.”

Rolls-Royce said it reached separate deals with the US Department of Justice and Brazilian prosecutors. It said: “These agreements relate to bribery and corruption involving intermediaries in a number of overseas markets, concerns about which the company passed to the SFO from 2012 onwards.

“These are voluntary agreements which result in the suspension of a prosecution provided that the company fulfils certain requirements, including the payment of a financial penalty.”

Since the inquiry was launched, Rolls-Royce have assured governments that it has reduced the use of third-party intermediaries and toughened up its compliance procedures.

“Rolls-Royce has co-operated fully with the authorities and will continue to do so,” the company said.

Shares were up 6.9 per cent at 710p in early trading on Tuesday.

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