Rolls-Royce publically announced that it has provided information to the Serious Fraud Office (SFO) in relation to bribery and corruption activities that have taken place overseas amongst its intermediaries. The SFO contacted the global engine systems company about allegations of illegal activities occurring in its associated third party companies in China and Indonesia. Rolls-Royce then conducted its own internal investigations and has handed over the results of those investigations to the SFO. They also uncovered malpractice in various undisclosed overseas markets.
Rolls-Royce reports that it has taken recent steps to ensure compliance with the Bribery Act and other international anti-corruption codes pointing to its new "Global Ethics Code" and a new "Intermediaries Policy". We understand that they have also strengthened their compliance function. Rolls-Royce stated in its press release that it "will appoint an independent senior figure who will lead a review of current procedures and report to the Ethics Committee of the Board".
Rolls-Royce Chief Executive, John Rishton, issued a statement saying: "I want to make it crystal clear that neither I nor the Board will tolerate improper business conduct of any sort and will take all necessary action to ensure compliance. This is a company with exceptional prospects and I will not accept any behaviour that undermines its future success".
It is not clear what measures the SFO will take against the company; however their open approach, a willingness to support compliant behaviour and the prosecutor's investigations would suggest that the SFO will not push for the most serious consequences. There may well be prosecutions of individuals and the company in the future but Rolls-Royce has already stated that they will co-operate fully with the authorities.
Proactive management of incidents of bribery and corruption can lead to better outcomes for the companies concerned.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.