Julia Irvine 8 Jan 2019 01:33pm

SFO cuts back on Rolls-Royce probe

The Serious Fraud Office has told several people whom it was investigating in relation to the Rolls-Royce bribery and corruption case that they are no longer suspects

However, it has made it clear that it is not closing the long-running case as it still has “a number of individuals” under investigation.

The SFO opened its investigation in early 2012 following concerns raised about the operation of Rolls-Royce’s civil business in China and Indonesia.

Rolls-Royce investigated and reported back on its findings and then in 2013 voluntarily launched an internal investigation into its energy defence, civil and marine businesses, including reviewing more than 250 relationships with intermediaries, agents, advisers and consultants.

As a result, the SFO became embroiled in its largest investigation to date – involving investigations, going back 30 years, of more than 100 employees in seven international jurisdictions and sifting through more than 30 million documents – with what it described as “the extraordinary cooperation of Rolls-Royce”.

In January 2017, the SFO entered into a five-year deferred prosecution agreement with the FTSE 100 company under which Rolls-Royce paid out £497.2m (representing the £258.1m it made in profits on the back of corrupt payments plus a financial penalty of £239.1m) and reimbursed the SFO £13m in costs.

The company also reached a deferred prosecution agreement with the US Department of Justice and a leniency agreement with the Brazilian authorities, under which it paid out $169.9m (£133.3m) and $25.6m respectively.

“Rolls-Royce continues to co-operate fully with the authorities, including ongoing co-operation as the Serious Fraud Office pursues enquiries into individuals,” a spokesperson said.

“We note the latest action taken by the SFO, but will not comment on individual cases.”

In November 2017, two former Rolls-Royce executives and an ex-employee pleaded guilty in the US to bribing foreign government officials between 2009 and 2013 in connection with a $145m contract involving a gas pipeline between central Asia and China.

As well as the SFO’s ongoing investigation, UK audit regulator the Financial Reporting Council is nearly two years into an inquiry into Big Four firm KPMG and its audits of the financial statements of Rolls-Royce Group (2010) and Rolls-Royce Holdings (2011 to 2013).