Engine maker Rolls Royce faces 'kick-back' inquiry

Jan 7, 2013

Investigation follows arrest in 2011 of Chinese airline executive alleged to have taken bribes

THE Serious Fraud Office is under pressure to mount a full-scale anti-bribery probe into Rolls Royce, the blue chip British jet engine maker, after new details of kick-back allegations were published by a blogger, the Daily Telegraph reports.

The blogger, writing under the name 'soaringdragon', alleges that Rolls made payments to an executive involved in handling orders worth $2 billion for aero engines it supplied to Air China in 2005 and China Eastern Airlines in 2010.

Chen Xin, an executive who worked for both airlines, was arrested in April

2011 by Chinese authorities investigating allegations he took bribes from intermediaries working for western companies.

The SFO initially sparked an inquiry by asking Rolls to probe bribery rumours concerning China and Indonesia. The Indonesian case involves allegations that Rolls paid a $20m (£12.5m) bribe and a Rolls-Royce car to Tommy Suharto, son of the former dictator Suharto, to persuade Garuda, the Indonesian airline, to buy its Trent engines to power the Airbus A330 aircraft it had ordered.

Rolls has handed the results of its own investigations - conducted by a law firm - to the SFO which has been gathering information from a number of sources and is now considering whether to launch an investigation. The SFO refused to comment but Rolls said: ³We are not under investigation.²

Under the terms of the UK's draconian Bribery Act 2010, Rolls Royce directors could be held legally responsible for the acts of employees and middle-men and even face prison.

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Rolls Royce jet engines is completely separately owned company from Rolls Royce cars and engines shown in the heading. No doubt you will be hearing from the latter's lawyers shortly.