Aerospace and defense company Rolls-Royce announced this week that the U.S. Department of Justice has joined the U.K. Serious Fraud Office in an ongoing formal criminal investigation relating to allegations of foreign bribery and corruption.
As Compliance Week previously reported, Rolls-Royce informed the SFO in December 2012 that it had discovered “matters of concern” in China, Indonesia, and other overseas markets. Most recently, in its annual report released March 5, the company said, “the group is currently under investigation by law enforcement agencies, primarily the Serious Fraud Office in the UK and the U.S. Department of Justice.”
In response to the investigation, Rolls-Royce said it has “evaluated and tested the group's policies, procedures, and controls over the selection and renewal of intermediaries, contracting arrangements, ongoing management, payments and responses to suspected breaches of policy,” the company stated. “We sought to identify and tested payments made to intermediaries during the year, made inquiries of appropriate personnel and evaluated the tone set by the board and the executive leadership team and the group's approach to managing this risk.”
The company stated that it also assessed whether the financial effects of potential or suspected breaches of law or regulation have been properly disclosed in financial statements, and found that the disclosures “reflect appropriately the matters required to be disclosed by accounting standards.”
Rolls-Royce added that the investigation is at “too early a stage to assess the consequences, if any, including, in particular, the size of any possible fines.”
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