Yesterday two men were arrested in connection with investigations which are believed to concern Rolls-Royce’s dealings in Asia. The arrests come following various warranted searches across London implemented by the Serious Fraud Office (SFO).
Both the SFO and Rolls-Royce have declined to comment on the arrests, although a source stated that the two men are not current or former employees of the aerospace and defence group, whilst one is believed to be an agent used by the company in Indonesia. Moreover it is believed that five residential addresses and one office, not believed to be that of Rolls-Royce, were raided.
The arrests come following the announcement last December that the SFO had launched an investigation into potential bribery and corruption by Rolls-Royce throughout Indonesia and China. Additionally the previous year saw the company pass information to the SFO regarding bribery and corruption, with the company stating that it could be facing prosecution as a result. Rolls-Royce has around 45,000 employees globally and last year appointed a lawyer to review its compliance measures.
A number of the allegations against the company occurred over a decade ago and include claims by an ex-employee that around $20 million and a Rolls-Royce car were given to Tommy Suharto (son of Indonesia’s then dictator) in the early nineties, with the intention that this would lead to the country’s airline, Garuda, buying its engines for its aircrafts. Notably any relevant activities would only be covered by the Bribery Act 2010 if they occurred after June 2011 and would otherwise be covered by the old bribery offences contained in the Public Bodies Corrupt Practices Act 1889, the Prevention of Corruption Act 1906 and the Prevention of Corruption Act 1916. These offences would be harder to prove, with evidence of the involvement of senior management being necessary for prosecution of the company.
The defence industry has been subject to a number of similar allegations in recent years. In 2010 BAE Systems was fined £286 million due to its dealings in numerous countries and last month India cancelled a helicopter deal with Italian defence giant Finmeccanica worth £455 million following allegations of corrupt practices.