US prosecutors name five in Rolls-Royce corruption case

New details about bribery and corruption at Rolls-Royce that resulted in a record £671m fine have emerged after US court documents were unsealed.

The FTSE 100 company was hit with the penalty at the start of the year after it admitted decades of making payments through “middlemen” to win contracts around the world.

The engineer, which is a separate entity to the Rolls-Royce car maker, agreed to make the payment to settle the charges after an international investigation spearheaded by Britain’s Serious Fraud Office (SFO).

Newly revealed US court records show three former Rolls staff and two other people were charged in relation to a contract to provide services for a gas pipeline running from central Asia to China, with four of them admitting to corruption.

Allegations of bribery relate to Rolls-Royce’s energy gas turbine and compressor business, which the British company sold to Siemens three years ago for £785m.

Court papers claim the men agreed a plan to pay bribes to government workers and kickbacks disguised as commission payments on the Asia Gas Pipeline.

The US Justice Department said it had charged former Rolls employees James Finley, who was an executive in Rolls-Royce’s energy sales division; Keith Barnett, a former Rolls-Royce regional energy director in the US; and Louis Zuurhout, a former employee for a Dutch subsidiary of Rolls-Royce. 

Two others, Andreas Kohler, an employee in the German office of an unnamed engineering and consulting firm which worked for Rolls-Royce's customer in Kazakhstan, and Petros Contoguris, the founder and chief executive of Turkish oil and gas company firm Gravitas & CIE International which acted as an intermediary for Rolls-Royce in Kazakhstan, were also charged.

In July Finley pleaded guilty to one count of conspiring to violate the Foreign Corrupt Practices Act (FCPA), which covers bribery offences and one count of violating the law.

In separate court appearances that began last year, Mr Zuurhout, Mr Kohler and Mr Barnett each pleaded guilty to one count of conspiracy to violate the FCPA.

US legal officials said Mr Contoguris was believed to be outside America and was not available to comment on the case.

In a statement Rolls-Royce said it had “committed to full ongoing co-operation with the Department of Justice and cannot comment on action against individuals”.

A spokesman for the company added: “We sold our energy business in 2014 and when we announced the deferred prosecution agreements with the US Department of Justice and Serious Fraud Office in January this year we made it plain that the behaviour described by the investigating authorities was completely unacceptable and we have apologised unreservedly for it. 

“These past practices do not reflect the manner in which Rolls-Royce does business today and we have zero tolerance of business misconduct of any sort.”

The SFO said it is continuing to investigate the actions of people related to Rolls-Royce's civil, defence, marine and former energy divisions as it continues to seek out wrong-doing related to the engineering giant.

The settlement deal Rolls-Royce agreed in January under a “deferred prosecution” agreement allowed the company to avoid a criminal prosecution that could have seen it lose much of its £83bn order book. Many states - which form a huge part of Rolls-Royce’s client base - are prohibited from doing business with companies that have been convicted.

Judge Sir Brian Leveson, who oversaw the settlement, said “truly vast, endemic” bribery had taken place within the company. He added that the penalty could have been much higher if Rolls had not co-operated or transformed its leadership and behaviour since the illegal practices were discovered.

The Telegraph | Wednesday, 8 November, 2017  
http://www.telegraph.co.uk/business/2017/11/08/us-prosecutors-name-five-rolls-royce-corruption-case/