SFO to investigate Rolls Royce

The company is alleged to have engaged in dastardly dealings in Indonesia. If it's true, it was a long time ago.

by Emma Haslett

Rolls Royce may be the shining example of everything marvellous about ‘Made in Britain’, but its halo was slightly askew this morning after the Serious Fraud Office launched a formal investigation into alleged bribery and corruption by the company.

The investigation is into allegations by former Rolls-Royce employee Dick Taylor this time last year, that the company paid a bribe of $20m and gifted a blue Rolls-Royce to Tommy Suharto, the son of former Indonesian dictator, General Suharto. In return, Indonesian flag carrier Garuda (allegedly) bought its Trent 700 engines. According to Taylor, it took place back in the early 1990s, so gathering evidence won’t be straightforward. There have also been allegations of corruption in China.

Other than confirming the SFO investigation, Rolls-Royce remained tight-lipped this morning. In December, chief executive John Rishton said that ‘neither I nor the board will tolerate improper business conduct of any sort and will take all necessary action to ensure compliance.’

In its full-year results in February, the company added that it had ‘significantly strengthened our compliance procedures in recent years’ and that it had ‘appointed Lord Gold to lead a review of current procedures and report to the ethics committee of the board’.

Tommy Suharto, on the other hand, issued an impassioned denial: In a letter to SFO director David Green, his lawyer said ‘we would like to state categorically that he did not, and has never, received monies or a car from Rolls-Royce and nor did he recommend their engines to Garuda.

‘These allegations are false and have arisen, it appears, via internet comments posted by an ex-employee, not through any formal source.’

Admittedly, it’s been an ok year for the company, which posted a 24% rise in profits back in February – and is likely to do the same this year, after Airbus launched its Dreamliner-killing A350, powered by Rolls-Royce Trent XWB engines.

But it’s also still recovering after various engine problems in 2010. So it probably would have preferred to have started 2014 without something like this hanging over its head…

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