Rolls-Royce agrees to massive fines
January 17, 2017
Shares in Rolls-Royce rose 4.4 percent on Tuesday, after a British judge approved the settlement deal to end a four-year investigation.
The deal could open a new chapter for the British giant, which supplies engines for passenger planes, military jets, ships and nuclear submarines. Despite sharing the name with the famous car brand, Rolls-Royce Plc has no links with the car company currently owned by the German automaker BMW. The two entities split in 1973.
According to the settlement, the engine-making company would need to pay a total of 671 million pounds ($832.6 million, 776.8 million euros) to authorities in the UK, the United States and Brazil. Investigators from all three countries found evidence of misconduct spanning three decades and multiple nations, including China, Russia, India, Nigeria and Malaysia.
The probe was spearheaded by Britain's Serious Fraud Office (SFO). According to investigators, the case involved bribery of senior foreign officials and senior staff in foreign countries. SFO also cited suspicions of conspiracy to corrupt and false accounting.
Behavior 'unworthy' of Rolls-Royce
According to SFO, the four-year probe has been the largest in the institution's 28-year history, leading to the largest ever penalty for criminal conduct against a company in Britain.
Rolls-Royce admitted to "unacceptable" practices and said it "apologizes unreservedly for the conduct that has been uncovered."
The company has since overhauled its strategies and training, they added.
"This was unworthy of everything which Rolls-Royce stands for, and that our people, customers, investors and partners rightly expect from us," CEO Warren East said in a statement. "The past practices that have been uncovered do not reflect the manner in which Rolls-Royce does business today."
Transparency: fines are not enough
Commenting on the deal, watchdog Transparency International said that a fine was "insufficient as a punishment and deterrent" when it comes to bribery. Instead, Transparency's UK executive director Robert Barrington said that responsible individuals should face charges.
Settling the issue with fines "sends an unfortunate message that large companies can escape criminal prosecution by paying their way out - somewhat ironically for a bribery case," Barrington said.
dj/dr (Reuters, AFP, AP)