Rolls-Royce CEO Warren East Declares Past Behaviour Completely Unacceptable And Reaffirms Zero Tolerance Of Business Misconduct

Rolls-Royce has entered into a Deferred Prosecution Agreement (DPA) with the UK’s Serious Fraud Office (SFO) with the approval of the President of the Queen’s Bench Division (The Right Honourable Sir Brian Leveson) and published by the SFO.

Rolls-Royce has also reached a DPA with the US Department of Justice (DoJ) and a Leniency Agreement with Brazil’s Ministério Público Federal (MPF). These agreements relate to bribery and corruption involving intermediaries in a number of overseas markets, concerns about which the company passed to the SFO from 2012 onwards following a request from the SFO. These are voluntary agreements, which result in the suspension of prosecution provided that the company fulfils certain requirements, including the payment of a financial penalty. The agreements will result in the total payment of £671 million (approx. $826 million).

“The behavior uncovered in the course of the investigations by the Serious Fraud Office and other authorities is completely unacceptable and we apologize unreservedly for it," said Warren East, Chief Executive, Rolls-Royce. This was unworthy of everything which Rolls-Royce stands for, and that our people, customers, investors and partners rightly expect from us.”

“The past practices that have been uncovered do not reflect the manner in which Rolls-Royce does business today. We now conduct ourselves in a fundamentally different way. We have zero tolerance of business misconduct of any sort.”

“We have cooperated fully with the authorities and will continue to do so," said Ian Davis, Chairman, Rolls-Royce. "The Board has taken extensive action to strengthen ethics and compliance procedures across the company so that high standards of business conduct are embedded as an essential part of the way we do business.”

“We share a determination to see that Rolls-Royce comes out of this episode as a more trusted, resilient and better managed business that ‘wins right’ every time. Our underlying technologies and skills are as strong as ever and we are well positioned in long-term growth markets.”

Under the terms of the DPA with the SFO, Rolls-Royce will pay £497,252,645 (approx. $612,068,280) plus interest under a schedule lasting up to five years, plus a payment in respect of the SFO’s costs.

(Source: Rolls-Royce news release)

FMI: www.rolls-royce.com