Rolls-Royce has detailed further the financial schedule for settling the bribery case against the manufacturer, as it turns its attention towards rebuilding its image.
Under a court-approved agreement with the UK’s Serious Fraud Office, Rolls-Royce will pay a substantial financial penalty to avoid prosecution after allegations of corruption involving intermediaries in the Asia-Pacific region.
Chief executive Warren East describes the company’s behaviour as “completely unacceptable” and adds that it is apologising “unreservedly”.
“This was unworthy of everything which Rolls-Royce stands for, and that our people, customers, investors and partners rightly expect from us,” he says.
The company’s response to the probe has included implementing new compliance policies and providing employees with ethics training covering a range of areas. It has also set up a specific internal channel for reporting concerns.
Rolls-Royce states that it has taken “decisive” disciplinary action where rules have been broken.
“This has resulted in a number of people leaving the business and we no longer use any of the intermediaries who have been implicated,” the company says, adding that it has reduced “dramatically” the number of intermediaries it utilises.
East insists the engine manufacturer has “fundamentally” changed the way it does business, adding: “We have zero tolerance of business misconduct of any sort.”
The overall penalty – spanning three judicial authorities in the UK, USA and Brazil – amounts to £671 million ($808 million) including £497 million in respect of the Serious Fraud Office.
Rolls-Royce will pay £119 million of the SFO sum by the end of June this year and another £100 million by the end of January 2019. These will be supplemented by further payments of £130 million and £148 million in 2020 and 2021 respectively.
The company will also pay almost $170 million to the US Department of Justice and over $25 million to Brazilian regulators.
Rolls-Royce’s share price rose by around 8% on 17 January following its disclosure of the deferred prosecution agreement and its indication of better-than-expected financial results.
Chairman Ian Davis says the company co-operated “fully” with authorities and that it is determined to emerge as a “more trusted, resilient and better-managed business”.
Source: Cirium Dashboard
