Rolls-Royce Holdings PLC (LON:RR) announced its 2016 results this week, revealing one of the biggest pre-tax losses in UK corporate history – £4.6bn. The results were affected by various factors including £671m incurred in settling world-wide bribery and corruption charges. Corporate Partner Sophie Brookes looks behind the headlines at the circumstances which led to the bribery fines to see what lessons can be learned by other companies aiming for a ‘Rolls-Royce standard’.
The SFO investigation
In September 2013 the Serious Fraud Office (SFO) opened an investigation into Rolls-Royce examining the conduct of its wider corporate group over several decades and across many jurisdictions. The investigation focused on the use of third party intermediaries to make corrupt payments to officials so that Rolls-Royce won certain lucrative public contracts relating to the sale of aero engines, energy systems and related services.
As a result, Rolls-Royce faced various bribery and corruption charges, including five counts of failing to prevent bribery in Indonesia, Nigeria, China and Malaysia, clearly highlighting the fact that the UK’s bribery laws apply to conduct by UK businesses both at home and abroad.