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Two arrested in ongoing Rolls Royce bribery probe

Two people were arrested in London on Wednesday as part of the Serious Fraud Office’s investigation into aerospace and defense company Rolls Royce’s dealings in Asia.

The UK’s Serious Fraud Office (SFO) said in an emailed statement that search warrants were executed at various properties in London and two men were arrested, Reuters reported.

A separate source told Reuters that the men were not current or former employees of Rolls Royce.

Reports first appeared in China two years ago alleging that Rolls Royce had bribed executives of Air China and China Eastern Airlines to win sales in 2005 and 2010.

Rolls Royce said in late 2012 that the SFO had asked it to investigate allegations of misconduct involving intermediaries in Indonesia and China.

The SFO began a probe into the company in December, and last month the agency was granted so-called blockbuster funding “in the low millions” of pounds for its investigation.

Defense and aerospace companies often rely on intermediaries in countries where they lack a significant presence or where law requires them to work through local vendors.

BAE Systems Plc paid $450 million in fines to the United States and Britain in 2010 after a lengthy investigation into its dealings in Saudi Arabia, Tanzania, Sweden, the Czech Republic and Hungary.

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Julie DiMauro is the executive editor of FCPA Blog and can be reached here.

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