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Rolls Royce under investigation by the SFO

The BBC online service reported Thursday that Rolls Royce is in talks with the U.K. Serious Fraud Office (SFO) regarding potential allegations of bribery and corruption in Indonesia and China.

It was reported that the investigation began when the SFO requested information from Rolls Royce about possible bribe-paying in those two countries. This prompted Rolls Royce to “to bring in a legal firm to conduct an internal investigation earlier this year, which uncovered potential misbehaviour in other countries as well as the two named by the SFO.”

The investigation focused on certain intermediaries involved in the countries in question.

Rolls Royce is reported to be cooperating with the SFO in the investigation. Chief Executive John Rishton was quoted as stating, “”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.”

In a prepared statement, the company said, “It is too early to predict the outcomes, but these could include the prosecution of individuals and of the company.”

At this point, it is not clear if any of the allegations would fall under the U.K. Bribery Act, which became effective on July 1, 2011. But the BBC noted that “Some of the allegations go back more than 10 years.”

Rolls Royce has revamped its compliance program over the past five years, including creating the role of Chief Compliance Officer for the company in 2010.

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Thomas Fox is a contributing editor of the FCPA Blog.

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