Subscribe to email alerts
Governance, conduct and culture
Organisational change and transformation
Public sector advisory
Forensic accounting and disputes
Cyber forensic, digital forensic and forensic discovery
Fraud, corruption and investigations
Real estate funds management
Real estate investment
Private equity and special situations investment
Holder of an AFSL
Real estate advisory
Project sales and management
Turnaround and restructuring
Independent business reviews
Receiverships, administrations and liquidations
Rolls-Royce is synonymous with quality and reliability. But the outcome, in January, of a deferred prosecution agreement (‘DPA’) in the UK for bribery and corruption offences has tarnished this reputation.
This article summarises the case and considers it in the light of the Transparency International Corruption Perceptions Index (‘TI CPI’). We then take a look at the developments in Australia and how the bribery and corruption landscape (regulation and enforcement) is shifting.
Rolls-Royce was charged with foreign bribery and corruption spanning at least twelve countries and 24 years. Rolls-Royce companies and some high-level executives conspired to make payments to intermediaries knowing that they would be used to bribe officials in countries including Thailand, Brazil, Kazakhstan, Azerbaijan, Angola, Indonesia and Iraq. The bribes were made in return for foreign officials providing confidential information and awarding contracts to Rolls-Royce companies. The allegations included Rolls-Royce paying a USD20 million bribe to persuade Garuda to buy Rolls-Royce engines for its Airbus A330s.
The illegal conduct involved the Rolls-Royce publicly-listed company in the UK, operating in aerospace, marine and energy; and a subsidiary headquartered in the US and therefore subject to the Foreign Corrupt Practices Act.
DPAs were reached with the UK SFO and the US Department of Justice (‘DOJ’). Rolls-Royce is to pay the equivalent of over AUD1 billion in fines:
DPAs are voluntary, negotiated settlements between a prosecutor and a defendant for serious corporate crime. They suspend a prosecution in return for compliance with conditions, which typically require a company to:
If the conditions are fulfilled, the prosecution is discontinued. A breach of them, however, can result in the prosecution resuming, and further penalties. The UK allows DPAs for corporations only, while in the US, DPAs can be used for both corporations and individuals and across wider crime types.
The case provides insights for corporates operating overseas, dealing with enforcement agencies, and responding to a culture of corruption.
The Rolls-Royce case reinforces the need for extra vigilance in countries where information like Transparency International’s Corruption Perceptions Index shows that there is high level of corruption. The index measures perceptions of corruption on a scale of 0 (highly corrupt) and 100 (very clean). The countries where the bribery took place included some of the lowest-ranked countries:
KordaMentha partners, Grant Graham and Neale Jackson, have been appointed Voluntary Administrators by the Board of menswear clothing retailer, Meccano 2016 Limited, trading as Meccano.
Earlier this year, the Australian government introduced the Fair Work Amendment (Protecting Vulnerable Workers) Bill, which sets out to increase the penalties for serious contraventions and broaden the scope of compliance respon...
We are pleased to advise that our Forensic practice has been recognised as the leading digital forensic group in Asia-Pacific in Who’s Who Legal 2018 Investigations edition.
Most creditors of Network Ten are today receiving payments of 100 cents in the dollar under a dividend distribution announced by KordaMentha Restructuring.