Rolls-Royce (LON:RR) Paid Bribes To Win Deals

The Manchester, UK-based Rolls-Royce (LON:RR), which is a leading manufacturing multinational of the country has been accused of bribing officials to win lucrative contracts. According to the allegations, the business hired middlemen for broking deals in 12 countries, including China, India, Brazil, Indonesia, Nigeria, Iran, Iraq, South Africa, Angola, Azerbaijan, Saudi Arabia, and Kazakhstan.

In some cases, the business even paid bribes to win these deals.

Rolls-Royce Pays $12 Million Bribe for Defense Deals

The investigation was carried out by the BBC and Guardian jointly. They found that an unregistered agent, Sudhir Choudhrie, was paid $12 million to get a deal for supplying engines for Hawk aircrafts that are made by BAE Systems. In India, it is illegal to pay agents to secure defense deals. A resident of London, Choudhrie is already on the blacklist in India, as the government suspects him for corruption.

Sudhir has been in trouble before as well. Back in 2014, the Serious Fraud Office or SFO had arrested Sudhir and his son Bhanu on charges of bribery. But they were released later as the charges could not be proved.

According to the allegation, Peter Ginger, who is a former BAE executive, went with Bhanu to Switzerland in 2007 and made a payment by cash of hundreds of thousands of pounds to an undisclosed bank account. The investigation has uncovered testimony and leaked documents that show Rolls-Royce could have gained by making illicit payments.

BBC and the Guardian say Rolls-Royce (LON:RR) is likely to have gained by hiring middlemen to pay bribes for several years.

Interestingly, Ginger was an important negotiator with the Indian government for the sale of the Hawk aircrafts. The deal was worth more than 400 million pounds.

The Choudhrie’s Deny All Charges

Sudhir Choudhrie has denied all charges through his lawyers. “He has never paid bribes to government officials or acted as an illegal middleman in defense deals. Mr. Choudhrie has no knowledge of what bank accounts have been set up or operated by Mr. Ginger or what sums if any he has deposited in them in cash”.

Ginger has also denied any involvement. He said he did not have any financial dealings with Rolls-Royce, and has never paid or accepted any bribes.

Rolls-Royce denied commenting on the issue. “We are fully cooperating with the authorities and we cannot comment on ongoing investigations”, they said. More than 30 investigators with the SFO are working on the case at this time.