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Bribery Probes in UK, U.S. and Brazil Settled for $809 Million by Rolls-Royce


01/17/2017


Bribery Probes in UK, U.S. and Brazil Settled for $809 Million by Rolls-Royce
Through a series of payments totaling 671 million pounds ($809 million), British engineering group Rolls-Royce Plc intends to bring to an end and settle cases of alleged bribery and corruption involving intermediaries with settlements with authorities in Britain, the United States and Brazil, the company announced and said that the settlement agreement had been reached already.
 
"An appropriate update on the implications of these agreements will be provided at the time" when Rolls reports its financial results for 2016 on Feb. 14, the company also said in a statement.
 
Early indications of its full-year profits and cash for 2016 would be ahead of expectations, the company also said.
 
Responding to weak demand from shipping and energy customers, about a month ago, the maker of aero engines had said it would cut 800 jobs in its marine business, and the announcement of the settlement as well as the profit outlook come about a month since that lay off announcement.
 
For Britain's Serious Fraud Office, the settlement with British authorities, for 497.25 million pounds, was the biggest ever.
 
About 293 million pounds in the first year would have to be paid by the group due to the deals with the three authorities, Rolls said.
 
Rolls has agreed to make payments to the DoJ totaling nearly $170 million and to the MPF totaling $25.58 million under the terms of the agreements with the U.S. Department of Justice, Brazil's Ministerio Publico Federal (MPF).
 
Rolls will pay 497.253 million pounds plus interest under a schedule lasting up to five years, plus a payment in respect of the SFO's costs under the terms of a deferred prosecution agreement with Britain's Serious Fraud Office, the company said.
 
The proposed agreement with SFO was still subject to court approval.
 
"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," the company said in its statement. "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."
 
According to the company's latest annual report, in a bid to curb bribery and corruption, Rolls-Royce has set up an audit committee at each of its units since the concerns were brought to light.
 
However this is not the first time that such a settlement, as with Rolls, has been made with Britain's SFO. To settle long-running corruption investigations, in 2010, 288 million was agreed to be paid to the agency by military contractor BAE Systems Plc.
 
After a slowdown in several markets hit profits, Rolls launched a program in 2015 to cut costs and simplify its operations and the company is still in the midst of the program.
 
(Source:www.reuters.com)