In the largest investigation to date by the Serious Fraud Office, Rolls Royce plc and Rolls Royce Energy Systems, Inc agreed to a deferred prosecution agreement arising out corrupt payments made in various countries, including Thailand. The deferred prosecution agreement is accompanied by an agreed statement of facts. The agreed facts about what occurred in Thailand are set out on pages 9 to 19 of the statement of facts.
The entire statement of facts should be reviewed and we will be reporting on further developments in this matter (e.g., corruption investigations like this usually trigger additional investigations, arrests, etc.), but there are two key immediate take-away points. First, the extremely high danger of using intermediaries – whether they are called agents, consultants or even distributors – when dealing with government departments and state-owned enterprises. Second, the failure to conduct seriously robust compliance reviews not only on local staff, but also intermediaries. Remote control compliance monitoring is justifiably considered a farce now.
The Serious Fraud Office has made arrests, and the Financial Times (subscription required) reports that:
The Serious Fraud Office is planning to make more arrests in its investigation into allegations of bribery and corruption at Rolls-Royce, according to the agency’s head.
David Green told Bloomberg the investigation concerned several divisions of Rolls-Royce business activity, adding: “There will be more arrests.” An SFO spokeswoman confirmed the statement by Mr Green was accurate.
Thai officials have not arrested or identified any of the recipients of the corrupt payments, but the Bangkok Post reports as of 19 January 2016:
The National Anti-Corruption Commission (NACC) and Thai Airways International (THAI) Plc have pledged to examine the case in which British engineering giant Rolls-Royce admitted to bribing agents of the of the Thai state and employees of THAI to win business
NACC member Witthaya Arkhompitak told the Bangkok Post the anti-graft agency’s foreign affairs office was aware of the issue and it will work with the UK’s Serious Fraud Office (SFO) to gather all the gather all the information about the case before sending it to the NACC members for examination, Mr Witthaya said.
For more information about foreign and Thai anti-corruption laws, click here.