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Rolls-Royce co-operating with Brazilian bribery inquiry


Rolls-Royce logo

Rolls-Royce logo

Rolls-Royce logo

The engineering giant Rolls-Royce was tonight revealed to be co-operating with the authorities in Brazil as they investigate a multi-billion-dollar bribery scandal at the state-run oil company Petrobras.

Rolls-Royce is facing questions about its ties to businessmen caught up in the corruption inquiry that has already led to the indictment of more than 100 senior corporate and political figures.

Shares in Rolls-Royce fell in February after reports that it was being dragged into the scandal, although the company said at the time that it had not yet been approached by the authorities to help with the investigation.

“We are co-operating with investigating authorities in Brazil, but are unable to comment further on a continuing investigation. We have repeatedly made it clear that Rolls-Royce will not tolerate business misconduct of any kind,” said a spokesman.

The firm's role in the inquiry, first reported by the Guardian, is one of several increasingly complicated problems for Rolls-Royce, which last month issued its fourth profit warning within 18 months as new chief executive Warren East took the reins.

Rolls-Royce is also embroiled in a Serious Fraud Office investigation about its intermediaries in overseas operations, after a whistleblower approached the fraud squad with allegations of malpractice in China and Indonesia.

The Petrobras investigation, known locally as Operation Car Wash, has already taken in several global companies. SBM Offshore, a Dutch oil platform supplier, signed a deal in March to co-operate with the authorities.

Rolls-Royce was one of numerous companies named by a former Petrobras manager, Pedro Barusco, when he made a plea statement to prosecutors earlier this year, outlining the firms he claimed paid bribes to win work with the Brazilian firm.

The scandal began with the arrest of Petrobras’ former director of refining and supply, Paulo Roberto Costa, in early 2014. He was sentenced in April to seven years and six months in prison for money laundering and racketeering. However, he is expected to serve one year under house arrest due to time already spent in detention.

Petrobras itself has reported record-breaking losses of $7bn (£4.5bn) for last year, as the cost of the corruption inquiry weighed on the business. Chief executive Maria das Graças Foster and a string of other directors resigned in February.

Ms Foster’s long friendship with Dilma Rousseff, the president of Brazil, has led to further pressure on the ruling Workers’ party, which narrowly won re-election last autumn.

Protesters have this month called for her impeachment for failing to tackle corruption within her government. João Vaccari Neto, the party treasurer, was arrested in April.

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