Rolls-Royce is investigated by the SFO over alleged bribery abroad

Analysts think the company could be in line for a multimillion-pound penalty

The Serious Fraud Office has launched a criminal investigation into allegations of bribery and corruption at the defence and aerospace giant Rolls-Royce.

The move comes just over a year after Rolls-Royce first admitted that it was holding talks with the SFO over allegations made on the internet. At that time the company said: “It is too early to predict the outcomes, but these could include the prosecution of individuals and of the company.”

The SFO’s move suggests it believes it has found sufficient evidence to mount a more detailed investigation. The investigation is understood to have begun around alleged bribes paid by intermediaries to local companies in Indonesia and China which provided sales, distribution, repair and servicing. An internal investigation by Rolls-Royce in 2012 uncovered the possibility of similar infringements of bribery and corruption laws in a number of other countries Some of the allegations stretch back more than 10 years.

Rolls-Royce declined to comment any further. An SFO spokesman said: “We confirm that the director of the Serious Fraud Office has opened a criminal investigation.”

When the company revealed its talks with the SFO in December 2012, its chief executive John Rishton said: “I want to make it crystal clear that neither I nor the board will tolerate improper business conduct of any sort.”

The escalation of the SFO’s investigation suggests David Green, its director, has decided the agency has seen enough evidence for it to invoke its Section 2 powers that enable it to search property and compel people to answer questions and produce documents.

Rolls-Royce shares, which have risen more than 40 per cent in the year since the SFO inquiry was first announced, ended up 6p at 1,249p yesterday.

Analysts said Rolls-Royce could be in line for a multimillion pound financial penalty. Other recent settlements include BAE Systems’ £30m SFO fine in February 2010 when it pleaded guilty to a charge of breach of duty to keep accounting records of payments made to a former marketing adviser in Tanzania over the sale of a radar system in 1999.

One analyst said: “These investigations are always negative for sentiment because it creates an unknown.”

In July GlaxoSmithKline referred itself to the SFO over allegations that it had bribed doctors to use its drugs. It made no admission of guilt, but said the allegations were “shameful and we regret this has occurred”.

Under the 2010 Bribery Act, the SFO has powers to investigate and prosecute corruption at home or abroad. Companies can be considered for immunity if they can demonstrate they alerted the SFO to evidence of wrongdoing.

Start your day with The Independent, sign up for daily news emails
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific