Rolls-Royce to Pay £671m to Resolve Bribery Claims and Escape Prosecution

Rolls-Royce Announces Agreements In Principle with Investigating Authorities

(Source: Rolls-Royce plc; issued Jan 16, 2017)

Rolls-Royce announces that it has in principle reached a Deferred Prosecution Agreement (DPA) with the UK Serious Fraud Office (SFO), which was the subject of a preliminary court ruling today. The proposed DPA is subject to final judicial approval and the SFO and Rolls-Royce will appear at court on 17 January 2017 to seek this approval.

In addition to the agreement with the SFO, Rolls-Royce has also reached a DPA with the US Department of Justice (DoJ) and a Leniency Agreement with Brazil’s Ministério Público Federal (MPF).

Rolls-Royce has co-operated fully with the authorities and will continue to do so.

These agreements relate to bribery and corruption involving intermediaries in a number of overseas markets, concerns about which the company passed to the SFO from 2012 onwards. These are voluntary agreements which result in the suspension of a prosecution provided that the company fulfils certain requirements, including the payment of a financial penalty.

In total, these agreements, if finalised, would result in the payment of approximately £671m*. Under the terms of the agreements with the DoJ and MPF, Rolls-Royce has agreed to make payments to the DoJ totalling $169,917,710 and to the MPF totalling $25,579,179. Under the terms of the DPA with the SFO, Rolls-Royce will pay £497,252,645 plus interest under a schedule lasting up to five years, plus a payment in respect of the SFO’s costs.

As a result, total payments by Rolls-Royce in the first year of all three agreements would be £293m*.

Rolls-Royce will report full year 2016 results on 14 February 2017 and an appropriate update on the implications of these agreements will be provided at that time. Early indications are that the Group has had a good finish to the year with both profit and, in particular, cash expected to be ahead of expectations.

Further details of any finalised agreements will be given at the appropriate time.

Today’s announcement has been determined to contain inside information.

* at current exchange rates.

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SFO Confirms DPA In Principle with Rolls-Royce PLC

(Source: UK Serious Fraud Office; issued Jan 16, 2017)

Following the Regulatory News Service announcement by Rolls-Royce PLC today, the Serious Fraud Office confirms that a Deferred Prosecution Agreement, subject to approval by the Court, has been reached between the SFO and Rolls-Royce PLC.

The approval will be sought at a public hearing tomorrow.

If approved, the Agreement, will result in a payment by Rolls-Royce PLC in the UK of £497,252,645 plus interest, as well as a payment of the SFO’s full costs.

The hearing will be at 10am on Tuesday, 17 January before Sir Brian Leveson QC, President of the Queen’s Bench Division, at the Southwark Crown Court, sitting at the Royal Courts of Justice (Court 4).

The SFO cannot provide further information until this hearing has concluded.

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Rolls-Royce to Pay £671m Over Bribery Claims (excerpt)

(Source: The Guardian; published Jan 16, 2017)

Rolls-Royce, Britain’s leading multinational manufacturer, is to pay £671m in penalties after long-running investigations into claims it paid bribes to land export contracts.

The settlement means the engineering giant will avoid being prosecuted by anti-corruption investigators in the UK, US and Brazil, though individual executives may still be charged.

It comes five years after investigators across three continents first began examining claims that the £13bn multinational had paid bribes to secure contracts in countries around the world.

Last year a joint Guardian and BBC Panorama investigation identified 12 countries in which Rolls-Royce had hired “commercial agents” or advisers to help it secure high-value contracts.

Anti-corruption campaigners said the deal showed the British government was not serious about tackling bribery, despite years of rhetoric promising to make the UK a hostile environment for the corrupt.

Susan Hawley, the policy director of Corruption Watch, described the settlement as “proof the UK is not willing to prosecute a large, politically connected company”.

Robert Barrington, the executive director of Transparency International, said “there must be a prosecution of individuals” in addition to the settlement.

In deals announced on Monday, Rolls-Royce said it would pay £497m to the UK Serious Fraud Office (SFO), subject to approval by the high court. It will also pay $169m (£140m) in penalties to the US Department of Justice and $25m to the Brazilian authorities.

The terms of the agreement with the SFO are to be examined on Tuesday by Sir Brian Leveson QC, the president of the Queen’s bench division of the high court. Under the proposed deal, known as a deferred prosecution agreement (DPA), Rolls-Royce will pay the penalties over five years, along with a payment covering the SFO’s costs. (end of excerpt)

Click here for the full story, on the Guardian website.

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