The UK Serious Fraud Office has launched a criminal investigation into allegations of bribery and corruption at Rolls-Royce, the leading aircraft engine maker.
The SFO’s move amounts to a stepping up of its inquiry into Rolls-Royce, which last year disclosed that the law enforcement agency had asked for information about allegations of malpractice in Indonesia and China.
The SFO on Monday said David Green, its director, had authorised a formal investigation into Rolls-Royce, adding: “The SFO confirmed today that the director has opened a criminal investigation into allegations of bribery and corruption at Rolls-Royce.”
Rolls-Royce said it had been informed by the SFO that “it has now commenced a formal investigation into these matters”.
Shares in the company closed up 0.48 per cent at £12.49 in London.
The SFO, aware of allegations made by a whistleblower about alleged malpractice, last year prompted Rolls-Royce to instruct Debevoise & Plimpton, a law firm, to conduct an internal probe.
Rolls-Royce said in December last year that it had passed information to the SFO “relating to concerns about bribery and corruption involving intermediaries in overseas markets”, following a request from the agency about “allegations of malpractice in Indonesia and China”.
“Investigations by Rolls-Royce have identified matters of concern in these, and in other overseas markets,” the company said at the time.
The US Department of Justice was also alerted to Rolls-Royce’s concerns, although the company said on Monday it had not taken any action.
Early this year Rolls-Royce sent a file to the SFO about the conclusions of its own internal inquiry.
In Indonesia, Rolls-Royce scrutinised allegations made on websites by Dick Taylor, a former employee.
According to one widely reported claim, in the early 1990s Rolls-Royce gave Tommy Suharto, son of Indonesia’s former president, a Rolls-Royce car and $20m in the hope it would help prompt Garuda, the country’s airline, to buy its Trent 700 engines.
The statement added the accusations against Mr Suharto were “false”. DRD said on Monday the SFO had not contacted Mr Suharto.
In January, Rolls-Royce hired Lord Gold, a veteran litigator and former senior partner at Herbert Smith, the law firm, to review its compliance procedures, although the company said on Monday that he had not yet made recommendations.
Among many roles, Lord Gold was appointed as a compliance monitor by the US Department of Justice after it reached a settlement in 2010 with BAE Systems, the UK defence group, over allegations of bribery. BAE paid a $400m fine.
John Rishton, Rolls-Royce’s chief executive, has insisted the company will not tolerate wrongdoing.
“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,” he said last year.