Rolls-Royce corruption claims spread to Brazil

Allegations of corruption at the aircraft engine-maker Rolls-Royce spread to Brazil on Monday, adding to the woes of a group that is already involved in a Serious Fraud Office (SFO) investigation into bribery claims in China and Indonesia.

The engineering group, which also supplies gas turbines for oil platforms, became embroiled in a long-running bribery case at Petrobras when it was named in court testimony by a former executive of the Brazilian state oil company as having paid bribes.

Pedro Barusco, a Petrobras veteran who struck a plea bargain in November and has emerged as one of the investigation’s key informants, told police he personally received at least $200,000 (£130,000) from Rolls-Royce — according to court documents reported by the Financial Times.

A spokesman for Rolls-Royce said: “We have not received details of the allegations made in recent press reports, nor have we been approached by the authorities in Brazil.

“We have always been clear that we will not tolerate improper business conduct of any sort and will take all necessary action to ensure compliance, including co-operating with authorities in any country.”

The Brazilian oil company is engulfed in a corruption scandal in which billions of dollars were allegedly paid by companies to win contracts. The FT’s report said that the allegations against Rolls-Royce relate to a $100m contract.

The British company has been operating in Brazil for around 50 years in sectors that include civil aerospace, marine and energy. The group also deals with the Brazilian armed forces, whose aircraft fleet includes Hercules C130s and helicopters, which are powered by Rolls-Royce engines. Rolls-Royce has been supplying Petrobras for more than a decade.

The latest allegations emerged a week after Rolls-Royce reported its first fall in sales in a decade as it warned its performance in 2015 would be worse than previously feared owing to low oil prices.

The Derby-based group had already announced it would cut thousands of jobs. Last week it reported that there was less demand for products in its marine business. which designs ships and supplies equipment for the offshore oil and gas industry. It also reported cutbacks from customers who use its equipment in power generation, construction and mining projects.

The allegations in Brazil follow the SFO opening a formal criminal investigation into Rolls-Royce at the end of 2013, after a whistleblower claimed that the jet engine manufacturer had bribed Tommy Suharto, son of Indonesia’s former president General Suharto, with $20m and a blue Rolls-Royce car.

The Suharto allegations were made by former Rolls-Royce employee Dick Taylor in a series of online comments. The company is accused of paying bribes in the 1980s and 1990s to persuade the national airline, Garuda, to order Rolls-Royce Trent 700 engines.

Lawyers for Suharto said at the time: “He [Suharto] did not, and has never, received monies or a car from Rolls-Royce and nor did he recommend their engines to Garuda, as alleged.”

Powered by article was written by Simon Goodley, for on Monday 16th February 2015 19.17 Europe/ © Guardian News and Media Limited 2010


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