ROLLS-ROYCE HOLDINGS PLC

INDUSTRY

Aerospace / Defense / Security

CORPORATE HEADQUARTERS

London, United Kingdom

SUMMARY OF ALLEGATIONS

Nationality of Foreign Officials: Angola

Summary of Allegations:

From in or around 2000 to in or around 2013, Rolls-Royce plc ("Rolls-Royce"), Rolls-Royce Energy Systems, Inc. ("RRESI"), an indirect subsidiary of Rolls-Royce, along with its employees, allegedly conspired to cause RRESI to make over USD 35 million in commission payments to third party commercial intermediaries, allegedly knowing that the payments would be used to pay bribes to foreign public officials on behalf of Rolls-Royce and RRESI in Thailand, Brazil, Kazakhstan, Azerbaijan, Angola, Iraq, and elsewhere, allegedly in exchange for foreign public officials' assistance in providing confidential information and awarding contracts to Rolls-Royce, RRESI and their affiliated entities.

RRESI has a global operation, including in Angola, Azerbaijan, Brazil, Indonesia, Iraq, Kazakhstan, Nigeria, Russia, Thailand, and elsewhere.

In Angola, Rolls-Royce, RRESI, and its employees, allegedly engaged third party commercial intermediary allegedly knowing that the commission payments would be used to pay bribes to the officials at Sociedade Nacional de Combustiveis de Angola, E.P. ("SONANGOL"). From in or around 2008 through in or around 2012, RRESI allegedly made approximately USD 1.2 million in corrupt commission payments to the intermediary knowing the payment would be used to pay bribes in exchange for confidential information and to win contracts for Rolls-Royce and RRESI. As a result, three SONANGOL projects were allegedly awarded to Rolls-Royce and RRESI, resulting in approximately USD 30 million profits.


Approximate Alleged Payments to Foreign Officials: approximately USD 1.2 million in corrupt commission payments

Business Advantage Allegedly Obtained: award of three SONANGOL projects resulting in approximately USD 30 million profits

Nationality of Foreign Officials: Azerbaijan

Summary of Allegations:

From in or around 2000 to in or around 2013, Rolls-Royce plc ("Rolls-Royce"), Rolls-Royce Energy Systems, Inc. ("RRESI"), an indirect subsidiary of Rolls-Royce, along with its employees, allegedly conspired to cause RRESI to make over USD 35 million in commission payments to third party commercial intermediaries, allegedly knowing that the payments would be used to pay bribes to foreign public officials on behalf of Rolls-Royce and RRESI in Thailand, Brazil, Kazakhstan, Azerbaijan, Angola, Iraq, and elsewhere, allegedly in exchange for foreign public officials' assistance in providing confidential information and awarding contracts to Rolls-Royce, RRESI and their affiliated entities.

RRESI has a global operation, including in Angola, Azerbaijan, Brazil, Indonesia, Iraq, Kazakhstan, Nigeria, Russia, Thailand, and elsewhere.

In Azerbaijan, Rolls-Royce, RRESI, and its employees, allegedly engaged third party commercial intermediary, allegedly knowing that the intermediary would use the commission payment to bribe foreign officials at the State Oil Company of the Azerbaijan Republic ("SOCAR"). From in or around 2000 through in or around 2009, RRESI allegedly made over USD 7.8 million in corrupt commission payments to the intermediary. As a result, RRESI allegedly won to supply approximately 45 turbines on multiple projects, resulting in over USD 50 million in total profits.


Approximate Alleged Payments to Foreign Officials: USD 7.8 million in corrupt commission payments

Business Advantage Allegedly Obtained: award of multiple projects, resulting in over USD 50 million in total profits.

Nationality of Foreign Officials: Brazil

Summary of Allegations:

From in or around 2000 to in or around 2013, Rolls-Royce plc ("Rolls-Royce"), Rolls-Royce Energy Systems, Inc. ("RRESI"), an indirect subsidiary of Rolls-Royce, along with its employees, allegedly conspired to cause RRESI to make over USD 35 million in commission payments to third party commercial intermediaries, allegedly knowing that the payments would be used to pay bribes to foreign public officials on behalf of Rolls-Royce and RRESI in Thailand, Brazil, Kazakhstan, Azerbaijan, Angola, Iraq, and elsewhere, allegedly in exchange for foreign public officials' assistance in providing confidential information and awarding contracts to Rolls-Royce, RRESI and their affiliated entities.

RRESI has a global operation, including in Angola, Azerbaijan, Brazil, Indonesia, Iraq, Kazakhstan, Nigeria, Russia, Thailand, and elsewhere.

In Brazil, Rolls-Royce, RRESI, and its employees, allegedly made corrupt commission payments to an intermediary with alleged knowledge that part of the commission would be paid to officials of Petroleo Brasileiro S.A. ("Petrobras"), state-owned company, in order to obtain lucrative contracts for equipment and long-term service agreements.

For example, former Petrobras executive Pedro Barusco, as part of his plea bargain, told Brazilian police that he received at least USD 200,000 in bribes from Rolls-Royce while he was at Petrobras. The bribes, which were allegedly paid through the company of Julio Faerman, a highly influential Brazilian businessman who allegedly paid bribes to oil executives and government officials on behalf of Petrobras contractors, were made to ensure that Rolls-Royce received a USD 100 million contract to supply power turbines for Petrobras oil platforms.

Between 2003 and 2013, RRESI allegedly paid the commercial intermediary approximately USD 9.32 million in commission payments, whom then turned to pay approximately USD 1.6 million in bribes to a Brazilian public official. The official allegedly helped RRESI win contracts from Petrobras on numerous projects.


Approximate Alleged Payments to Foreign Officials: USD 1.6 million

Business Advantage Allegedly Obtained: award of numerous Petrobras contracts

Nationality of Foreign Officials: China

Summary of Allegations:

In an article published on 6 January 2013, U.K.-based Telegraph reported that Rolls Royce faced accusations of bribing a Chinese airline executive. An executive who worked for both airlines allegedly acted as a middleman, receiving improper payments and facilitating the sale of aircraft engines worth USD 2 billion. The executive is alleged to have been arrested by Chinese authorities in 2011.


Approximate Alleged Payments to Foreign Officials: Unspecified

Business Advantage Allegedly Obtained: sale of aircraft engines worth USD 2 billion

Nationality of Foreign Officials: China, Kazakhstan

Summary of Allegations:

From in or around 2000 to in or around 2013, Rolls-Royce plc ("Rolls-Royce"), Rolls-Royce Energy Systems, Inc. ("RRESI"), an indirect subsidiary of Rolls-Royce, along with its employees, allegedly conspired to cause RRESI to make over USD 35 million in commission payments to third party commercial intermediaries, allegedly knowing that the payments would be used to pay bribes to foreign public officials on behalf of Rolls-Royce and RRESI in Thailand, Brazil, Kazakhstan, Azerbaijan, Angola, Iraq, and elsewhere, allegedly in exchange for foreign public officials' assistance in providing confidential information and awarding contracts to Rolls-Royce, RRESI and their affiliated entities.

RRESI has a global operation, including in Angola, Azerbaijan, Brazil, Indonesia, Iraq, Kazakhstan, Nigeria, Russia, Thailand, and elsewhere.

In Kazakhstan, Rollsy-Royce, RRESI, and its employees, allegedly conspired to make corrupt commission payments to third party commercial intermediaries. The parties allegedly knew that the intermediary would use a portion of the commission payments to pay bribes to foreign public officials in order to win contracts to supply turbines on Asia Gas Pipeline, LLP ("AGP") Lines A and B in 2009. AGP was a joint venture between Kazakh and Chinese state-owned and state-controlled entities that was designed to transport gas through pipeline between Kazakhstan and China. AGP was controlled by Kzakh and Chinese governments and performed government functions for the states.

In 2012, in addition, RRESI allegedly engaged a local distributor of parts and services, allegedly knowing that the beneficial owner of the distributor was a high-ranking Kazakh government official with decision-making authorities over Rolls-Royce's ability to continue operating in the country and win contracts to supply turbines for AGP Line C.

As a result of alleged corrupt transactions, RRESI made USD 5.44 million in corrupt commissions to multiple third party commercial intermediaries and conveyed additional benefits to the high-ranking government official.


Approximate Alleged Payments to Foreign Officials: USD 5.44 million in corrupt commission payments and additional benefits

Business Advantage Allegedly Obtained: influence government decision to allow Rolls-Royce to continue operating in the country and win contracts to supply turbines for AGP

Nationality of Foreign Officials: India

Summary of Allegations:

Between 24 March 2005 and 30 September 2009, Indian authorities restricted the use of third party intermediaries in connection with Indian Government defense contracts. Breach would lead to cancellation of agreements and debarment from future public procurement contracts. However, Rolls-Royce allegedly continued to use an intermediary in their attempt to win defense contracts. Rolls-Royce allegedly created fraudulent contracts in respect to general consulting services, rather than as commission payments in respect to the defense contracts.

On 3 March 2014, India's defense ministry confirmed that it is investigating the USD 1.2 billion deal Rolls Royce made with state-run Hindustan Aeronautics Limited. The Central Bureau of Investigation ("CBI") will investigate whether Hindustan Aeronautics Limited's deal to purchase jet engines from Rolls-Royce had breached bribery laws. Prosecutors added that it will look into USD 80 million worth of alleged kickbacks.


Approximate Alleged Payments to Foreign Officials: USD 80 million worth of alleged kickbacks

Business Advantage Allegedly Obtained: USD 1.2 billion deal

Nationality of Foreign Officials: Indonesia

Summary of Allegations:

Between 1 January 1989 and 31 December 1998, Rolls Royce senior employees allegedly agreed to pay two payments totaling USD 2,254,044 and a Rolls Royce Silver Spirit car to a third party commercial intermediary or company controlled by the intermediary. Later, two additional payments totaling USD 779,784 were paid to the managing director of the intermediary's company. The intermediary was reportedly Mr. Suharto, son of former long-term president of Indonesia and the bribe was allegedly paid as a reward for the intermediary's efforts in assisting Rolls-Royce to win contracts with Garuda Indonesia, the national airline. Mr. Suharto denied these allegations.

Former Garuda Indonesia CEO Garuda Indonesia Emirsyah Satar allegedly received bribes from Rolls-Royce in the form of cash amounting to €1.2 million (USD 180,000) as well as other benefits valued at USD 2 million in Indonesia and Singapore. The alleged bribes were allegedly paid through Soetikno Soedarjo, owner of Singapore-based Connaught International Pte Ltd. ("Connaught International"). Soedario, through use of his company, allegedly transferred the bribe money from the bank account of Connaught International to Emirsyah.


Approximate Alleged Payments to Foreign Officials: more than USD 2,254,044 and a car

Business Advantage Allegedly Obtained: contracts with Garuda Indonesia, the national airline

Nationality of Foreign Officials: Iraq

Summary of Allegations:

From in or around 2000 to in or around 2013, Rolls-Royce plc ("Rolls-Royce"), Rolls-Royce Energy Systems, Inc. ("RRESI"), an indirect subsidiary of Rolls-Royce, along with its employees, allegedly conspired to cause RRESI to make over USD 35 million in commission payments to third party commercial intermediaries, allegedly knowing that the payments would be used to pay bribes to foreign public officials on behalf of Rolls-Royce and RRESI in Thailand, Brazil, Kazakhstan, Azerbaijan, Angola, Iraq, and elsewhere, allegedly in exchange for foreign public officials' assistance in providing confidential information and awarding contracts to Rolls-Royce, RRESI and their affiliated entities.

RRESI has a global operation, including in Angola, Azerbaijan, Brazil, Indonesia, Iraq, Kazakhstan, Nigeria, Russia, Thailand, and elsewhere.

In Iraq, from in or around 2006 to in or around 2009, RESI allegedly received a contract award to supply gas generators to SOC. At some point after, RRESI allegedly learned that certain South Oil Company ("SOC") officials had concerns about the supplied turbines and subsequently threatened to blacklist Rolls-Royce from doing future business in Iraq. Rolls-Royce, RRESI, and its employees, allegedly engaged a third party intermediary, allegedly knowing that the intermediary would bribe SOC officials allegedly to persuade them to accept the turbines and keep SOC from "blacklisting" the company. As a result, Rolls-Royce made over USD 1.5 million in profits on the gas general deal.


Approximate Alleged Payments to Foreign Officials: persuade Iraqi officials to accept the turbines and prevent being black listed in future

Business Advantage Allegedly Obtained: USD 1.5 million in profits

Nationality of Foreign Officials: Korea, Republic of

Summary of Allegations:

Between 2000 and 2011, Tognum's MTU Friedrichshafen unit ("MTU") allegedly paid 39.9 million euros in commissions paid to companies and accounts controlled by Chung Eui Sung, a South Korean sales agents, in connection with sales of defense-related products to government customers.

Chung was employee at MTU from 1977 to 1987 following his 14 years of service in the South Korean Navy. Following his departure from MTU in 1987, Chung set up his own company, Systech Korea Co. Ltd ("Systech") later renamed UBMTech Korea Co. Ltd. ("UBMTech") in 2006, and worked as licensed local independent sales representative for MTU to sell defense products. South Korean government required use of such licensed local companies to regulate defense-related purchases. 

MTU and Systech allegedly spent the funds to host military officials. MTU and Systech allegedly financed training on MTU products for South Korean military officials, which included trips to Asian vacation resorts and night clubs in the Bangkok red-light district. Portion of the funds were also allegedly spent on gifts provided to the military officials, including golf equipment and swimming gear. 

Peter Kneipp, then chief of MTU's Asian unit from 2004 to 2010, allegedly was aware of the trips.

From 2000 to 2004, Chung allegedly received 21 checks from MTU totaling 1.1 million euros, 9 of which were cashed by MTU employees and handed over to Chung. In addition, MTU paid part of Chung's commissions to Singaporean accounts of an entity called Far Eastern Trading and Consulting from 2001 to 2002 and Prisma Corporate Ltd., incorporated in the British Virgin Islands, from 2006 to 2008.

On 24 June 2011, Daimler and Rolls-Royce Holding PLC secured full control, around 94%, of Tognum. Daimler later sold its shares to Rolls-Royce in 2014. Rolls-Royce renamed Tognum to Rolls-Royce Power Systems AG but kept the MTU brand.


Approximate Alleged Payments to Foreign Officials: leisure trips & luxury gifts

Business Advantage Allegedly Obtained: 12 million euros (USD 13.3 million) of profits

Nationality of Foreign Officials: Malaysia

Summary of Allegations:

Between 1 July 2011 and 30 November 2013, Rolls-Royce allegedly failed to prevent its employees from providing an Air Asia Group (“AAG”) executive with credits worth USD 3.2 million to be used to pay for the maintenance of a private jet despite those employees allegedly believing that, in consequence, the AAG executive intended to perform a relevant function improperly. The AAG executive allegedly requested the alleged bribe in return for his showing favor towards Rolls-Royce in the purchase of products and services provided by the company and its subsidiaries, including TCA services to be supplied to Air Asia X, a subsidiary of AAG.


Approximate Alleged Payments to Foreign Officials: credits worth USD 3.2 million

Business Advantage Allegedly Obtained: showing favor towards Rolls-Royce in the purchase of products and services provided by the company and its subsidiaries, including TCA services to be supplied to Air Asia X, a subsidiary of AAG.

Nationality of Foreign Officials: Nigeria

Summary of Allegations:

Between 2009 and 2013, Rolls-Royce employees allegedly engaged a Nigerian company in relation to projects in Nigera. In doing so, Rolls-Royce allegedly failed to prevent the Nigerian company from paying bribes to Nigerian public officials in exchange for commercial advantage for Rolls-Royce on two tenders in Nigeria - the Adanga project and Egina project. Rolls-Royce eventually withdrew from the Adanga tender due to unsuitability of its product. Rolls-Royce also withdrew from the Egina project after concerns were raised internally that confidential competitor information were received. Rolls-Royce was allegedly on course to win the tender and withdrew from the project prior to singing the contract.


Approximate Alleged Payments to Foreign Officials: Unspecified

Business Advantage Allegedly Obtained: commercial advantage, including confidential competitor information

Nationality of Foreign Officials: Russian Federation

Summary of Allegations:

Between 1 January 2008 and 31 December 2009, Rolls-Royce, RRESI, and its employees, allegedly engaged third party commercial intermediaries with alleged understanding that at least a portion of the commission would be passed onto the officials of Gazprom. The officials of Gazprom, Russian state-owned company, allegedly requested payments in exchange for influence Porovaya project  favor of RRESI. The contract was signed on 19 December 2008. At the time of the contract, neither proper due diligence were conducted nor formal contracts were in place with the intermediaries.


Approximate Alleged Payments to Foreign Officials: corrupt commission payments

Business Advantage Allegedly Obtained: influence to award project

Nationality of Foreign Officials: Thailand

Summary of Allegations:

From in or around 2000 to in or around 2013, Rolls-Royce plc ("Rolls-Royce"), Rolls-Royce Energy Systems, Inc. ("RRESI"), an indirect subsidiary of Rolls-Royce, along with its employees, allegedly conspired to cause RRESI to make over USD 35 million in commission payments to third party commercial intermediaries, allegedly knowing that the payments would be used to pay bribes to foreign public officials on behalf of Rolls-Royce and RRESI in Thailand, Brazil, Kazakhstan, Azerbaijan, Angola, Iraq, and elsewhere, allegedly in exchange for foreign public officials' assistance in providing confidential information and awarding contracts to Rolls-Royce, RRESI and their affiliated entities.

RRESI has a global operation, including in Angola, Azerbaijan, Brazil, Indonesia, Iraq, Kazakhstan, Nigeria, Russia, Thailand, and elsewhere.

In Thailand, Rolls-Royce, RRESI, and its employees, allegedly engaged a third party intermediary allegedly knowing that the intermediary's commission payments would be used to pay bribes to public officials at PTT Public Company Ltd. ("PTT") and its subsidiary PTT Exploration and Production Public Company ("PTTEP") in exchange for award of contracts for equipment and aftermarket products and services. From in or around 2003 through in or around 2013, RRESI allegedly made over USD 11 million in corrupt commission payments, allegedly resulting in award of GSP-5, GSP-6, OCS-3, Arthit, PCS, ESP 2006, and ESP 2012 projects in Thailand.


Approximate Alleged Payments to Foreign Officials: over USD 11 million in corrupt commission payments

Business Advantage Allegedly Obtained: award of GSP-5, GSP-6, OCS-3, Arthit, PCS, ESP 2006, and ESP 2012 projects in Thailand.

ENFORCEMENT RESULTS

Agencies: Brazil: Comptroller General (CGU)
Results: Criminal Fine, Leniency Agreement
Year Resolved: 2017
Compliance Monitor: N/A
Ongoing: No
Details:

Although Rolls-Royce had stated in February 2015 that the company had not been approached by the Brazilian authorities, believed to be the Office of the Comptroller General ("CGU"), the company confirmed on 30 August 2015 that it was now cooperating with the Brazilian investigations into the Petrobras scandal. Rolls-Royce faces question over the relationship with Mr. Faerman. Mr. Faerman has was charged with alleged bribery, money-laundering and tax evasion as part of a scheme and, in August 2015, Brazilian judge approved a high-profile plea bargain requiring him to cooperate with prosecutors in exchange for leniency.

Congressional Commission confirmed in September 2015 that it is conducting an investigation into Rolls-Royce's relationship with Petrobras and has requested documents from the U.K. Serious Fraud Office ("SFO"), which has not yet answered the request. The commission's inquiry opens up further scrutiny into the company in Brazil.

On 16 January 2017, Rolls-Royce announced that the company has reached a Leniency Agreement with Brazil’s Ministério Público Federal ("MPF"). As part of its leniency agreement with the MPF, Rolls-Royce agreed to pay a penalty of approximately USD 25,579,170 for the company’s role in a conspiracy to bribe foreign officials in Brazil between 2005 and 2008. 



Agencies: Germany: Stuttgart Public Prosecutor's Office
Results: Disgorgement, Prosecution of Individuals
Year Resolved: 2016
Compliance Monitor:
Ongoing: No
Details:

Tognum reportedly disclosed the investigation to the Ravensburg Public Prosecutor's Office in Germany, which is awaiting receipt of the Ernst & Young report. The final Ernst & Young report, allegedly detailing millions of euros of payments in South Korea by Tognum for defense-related goods, was submitted to the German prosecutors on 21 October 2011.

On 24 October 2011, the Ravensburg Public Prosecutor's Office confirmed that it had opened an investigation into Tognum's activities in South Korea, including allegations against a member of Tognum's executive board.

In April 2016, as part of the settlement with the German authorities, the ex-manager accepted a 10-month suspended jail term and paid 30,000 euros. As part of the settlement, authorities also seized 12 million euros (USD 13.3 million) of profits Tognum, now Rolls-Royce Power Systems AG, made from South Korean sales obtained through bribery.

In July 2016, German authorities confirmed that their investigation into Rolls-Royce, stemming from investigation into South Korean defense sales of then Tognum initiated in 2011, is expanding over sales across seven Asian countries, including unnamed five individuals with role in suspected sales by the units. The German authority confirmed that the additional investigation could lead to further profit seizures.



Agencies: India: Central Bureau of Investigation
Results:
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:

The CBI investigation is ongoing. On 17 September 2014, India announced that it was lifting the ban against Rolls Royce, and will allow the company to bid on its tenders.



Agencies: Indonesia: Corruption Eradication Commission
Results:
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:

Indonesian Public Officials & Third Party Intermediary

On 18 January 2017, Indonesia's Corruption Eradication Commission ("KPK") chairman Agus Rahardjo announced that the former Garuda Indonesia CEO Garuda Indonesia Emirsyah Satar had been involved in the Rolls-Royce corruption case. Emirsyah is alleged to have received bribes from Rolls-Royce by the KPK and the U.K. SFO. On 19 January 2017, the KPK announced that the agency may detain former president of Garuda Indonesia Emirsyah Satar as a suspect. However, KPK would first conduct its investigation, including searches, seizures, witness questioning and detention, before making such determination. Emirsyah was questioned on 17 February 2017. In addition to Emirsyah, the KPK also named Soetikno Soedarjo as another suspect in the case.

In January 2017, the KPK charged Emirsyah with corruption for his alleged role in a number of procurements by Garuda during his term as president director between 2005 and 2014, including the Rolls-Royce case. In particular, Satar allegedly accepted EUR 1.2 million and USD 180,000 in cash and USD 2 million in goods. The KPK also announced that the agency would start summoning a number of witnesses for questioning at the end of January 2017 once its investigators have studied evidence recently seized from five different locations.On 3 March 2017, the KPK questioned Richard Budihadianto, a former director of a Garuda subsidiary, as well as Setijo Wibowo, the current vice president of corporate planning.

The KPK also issued a six month travel ban on Emirsyah, Soedarja, Hadinoto Soedigno, former president director at Garuda Maintenance Facilities (GMF), Agus Wahyudo, former Garuda vice president for asset management, and businesswoman Sallyawati Rahardja.



Agencies: Internal Investigation
Results:
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:

In 2012, Rolls Royce hired the New York law firm Debevoise & Plimpton to conduct an internal investigation after the SFO requested information from the company, after a whistleblower made allegations about its conduct in China and Indonesia.

In January 2013, Rolls Royce announced the appointment of Lord Gold, a well known attorney, to lead a review of the Company's compliance policies and procedures.

In November 2015, Rolls Royce called in Slaughter and May, one of the UK's top five law firms, to advise the company on the corruption allegations and the UK investigation as the principal adviser. Media reports that the retention of Slaughter and May underlines the seriousness with which the company is treating the investigation.



Agencies: Thailand: Centre for National Anti-Corruption, Thailand: National Anti-Corruption Commission
Results:
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:

Thai Airways International Internal Investigation

On 19 January 2017, in a company statement, Thai Airways International ("Thai Airways") disclosed that it has launched a probe into the allegations that Rolls-Royce paid millions of dollars to airline employees and government officials to win contracts. Thai Airways will gather information from all sources to conduct a thorough investigation. The investigation should be completed by the end of April 2017.

National Anti-Corruption Commission ("NACC")

In January 2017, the National Anti-Corruption Commission ("NACC") announced that the agency and its staff were seeking more information from UK and US authorities to determine whether to launch their own probe. The secretary general of the NACC added that although civil compensation claims could still be made, some of the allegations unveiled by the UK SFO may have lapsed too long in time to bring criminal charges.

The NACC is investigating 26 people believed to have accepted bribes paid by Rolls-Royce. Those being investigated include the former minister and deputy minister of transport, Suriya Jungrungreangkit and Vichet Kasemthongsri. Vichet has denied being involved in the bribery scheme, claiming that he was not assigned to supervise Thai Airways in 2004-2005. The NACC has stated that there is evidence that Vichet was involved in Thai Airways' procurement process.

In February 2017, NACC announced that the agency has acquired a reasonable amount of information on the bribery and are waiting to hear back from the SFO. Once the NACC has enough solid information, the agency plans on setting up a sub-panel to conduct the probe. Thai Airways has provided NACC with regular updates of its investigation.

The investigation is expected to be completed by the end of 2017.

Centre for National Anti-Corruption ("CNAC")

On 1 February 2017, the chairman of the Centre for National Anti-Corruption ("CNAC") announced that the agency plans to probe the Rolls-Royce bribery scandal to learn how to prevent such bribery from occurring in the future. The CNAC won't focus its investigation on criminality and bringing culprits to justice as such function would be completed by the Office of the Auditor-General and the NACC.

The anti-graft agencies are sharing information and assisting each other's investigations.



Agencies: United Kingdom: Serious Fraud Office
Results: Criminal Fine, Deferred Prosecution Agreement, Disgorgement
Year Resolved: 2017
Compliance Monitor: N/A
Ongoing: No
Details:

In a press release on 6 December 2012, Rolls Royce announced that it voluntarily disclosed information relating to concerns about bribery and corruption involving intermediaries in overseas markets to the U.K. Serious Fraud Office ("SFO"). The company claimed it made the disclosures following a request for information from the SFO about allegations of malpractice in Indonesia and China.

On 23 December 2013, Rolls Royce announced that the SFO opened a formal investigation into allegations of bribery and corruption in China and Indonesia.

The SFO arrested two men on 12 February 2014 in connection with the Rolls Royce corruption investigation in Asia -- Bhanu Choudhrie, executive director of C&C Alpha Group Ltd., and his father, Sudhir Choudhrie. No charges were filed, and the Choudhries denied any wrongdoing. In July 2014, bail was lifted for the two men, and according to The Sunday Times, they are not expected to play a further role in the inquiry.

According to the media report dated 19 May 2016, the SFO has widened its Rolls-Royce probe to now include allegations in Brazil, Indonesia and China, and Nigeria.

In October 2016, the SFO reportedly indicated that the agency is "conducting major investigations into allegations of bribery and corruption involving both Rolls-Royce and Unaoil."

On 16 January 2017, the SFO confirmed that a Deferred Prosecution Agreement ("DPA"), subject to approval by the Court, has been reached between the SFO and Rolls-Royce. The DPA was approved by Sir Brian Leveson, President of the Queen’s Bench Division on 17 January 2017. Pursuant to the DPA, Rolls-Royce agreed to pay a disgorgement of £258,170,000 and a financial penalty of £239,082,645, totaling £497,252,645 (USD 604,808,392), plus interest, as well as a payment of the SFO's full costs in the amount of £13,000,000. Rolls-Royce admitted to paying additional bribes or failing to prevent bribery payments in connection with the company's business operations in China, India, Indonesia, Malaysia, Nigeria, Russia and Thailand between in or around 1989 and in or around 2013. 

The SFO's investigation into the conducts of individuals continues.



Agencies: United Kingdom: Serious Fraud Office
Results:
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:

Individuals

In February 2017, the SFO questioned former Rolls-Royce chief executive John Rose. Rose held the position of chief executive for Rolls-Royce from 1996 to 2011. Rose reportedly was one of many former Rolls-Royce executives questioned under caution in relation to this investigation. Individuals questioned under caution are invited to attend by investigators, often voluntary, read legal rights and not the same as being questioned as a witness.



Agencies: United States: Department of Justice
Results: Criminal Fine, Deferred Prosecution Agreement
Year Resolved: 2017
Compliance Monitor: N/A
Ongoing: No
Details:

Rolls-Royce

On 5 March 2014, Rolls Royce announced that the U.S. Department of Justice ("DOJ") launched an informal investigation following allegations that its executives bribed officials in Indonesia, China and India in order to win lucrative contracts.

On 17 January 2017, the DOJ announced that Rolls-Royce entered into a three year DPA to settle the charges that the company conspired to violate the anti-bribery provisions of the FCPA. Pursuant to the DPA, filed on 20 December 2016, Rolls-Royce agreed to pay a criminal penalty of USD 195,496,880, subject to a credit of the amount the company paid to the Brazilian authorities. As the the conduct underlying the resolution in Brazil overlaps with the conduct underlying part of the resolution by the DOJ, the DOJ credited the USD 25,579,170 that Rolls-Royce agreed to pay in Brazil against the total fine in the US. Thus making the total amount paid by Rolls-Royce to the US to  USD 169,917,710. In addition to the fine, Rolls-Royce agreed to continue to provide its full cooperation with the DOJ's ongoing investigation, including its investigation of individuals. 



ENTITIES/INDIVIDUALS INVOLVED

DETAILS OF HOW CONDUCT WAS DISCOVERED

Discovery Method: Whistleblower
Details:

Media reports claim that a whistleblower who had worked for the Company came forward with allegations concerning transactions in Indonesia.


Country: Indonesia

Discovery Method: Media or Investigative Report
Details:

According to press reports, Tognum retained Ernst & Young after being contacted in early 2011 by German magazine Der Spiegel asking about payments made in connection with a submarine deal in South Korea in 2008.


Country: Korea, Republic of

Discovery Method: Media or Investigative Report
Details:

In October 2016, BBC investigative documentary entitled "Panorama: How Rolls-Royce Bribed Its Way Around The World," produced with the Guardian, alleged that Rolls-Royce paid millions of pounds to agents suspected of corrupt or irregular practices to help the company win major government contracts. Alleged agents were allegedly used in countries including Brazil, India, China, Indonesia, South Africa, Angola, Iraq, Iran, Kazakhstan, Azerbaijan, Nigeria and Saudi Arabia. For example, Rolls-Royce allegedly paid around £10m to companies linked to Sudhir Choudhrie, an unregistered Indian agent, to help the company win a major contract to build engines for Hawk aircraft. It is illegal in India to use middlemen to win defense contracts.


Country: Angola, Azerbaijan, Brazil, China, India, Indonesia, Iraq, Kazakhstan, Nigeria, Saudi Arabia, South Africa, Iran, Islamic Republic of

Discovery Method: Media or Investigative Report
Details:

In early 2012, the UK SFO sought information from Rolls-Royce in respect of concerns regarding its civil business operations in China and Indonesia raised by internet postings. 


Country: China, Indonesia

KEY TAKEAWAYS

To be determined

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