UKEF launches Rolls-Royce fraud probe
UK Export Finance (UKEF) has launched an investigation to determine whether multinational manufacturer Rolls-Royce fraudulently obtained financial support from the government agency after the company admitted to bribery and corruption charges last month.
After a four-year investigation by the UK Serious Fraud Office (SFO), Rolls-Royce entered into a Deferred Prosecution Agreement (DPA) on January 17, admitting it had used multimillion-pound bribes to secure export orders across the world.
The DPA enables Rolls-Royce to account to a UK court for criminal conduct spanning three decades in seven jurisdictions and involving three business sectors.
According to the SFO, the manufacturer will pay penalties of £497.25mn plus interest, as well as reimbursing the SFO’s costs of around £13mn, in what is its largest investigation to date. The SFO continues its investigation into the conduct of individuals in the corruption, and is yet to determine whether it will prosecute.
UKEF will now conduct its own investigation to establish whether the engineering giant, one of its biggest customers, fraudulently received taxpayer money worth hundreds of millions of pounds.
Experts at Corruption Watch UK say UKEF must impose “some real consequences” for Rolls-Royce’s breaches of its anti-corruption warranties or it risks undermining its own anti-corruption procedures.
“Scrutiny of whether UKEF’s anti-corruption procedures are up to scratch is desperately needed at a time that the government has announced that it will double the risk appetite of UKEF from £2bnto £5bn,” says Corruption Watch UK in a statement.
“If UKEF is going to manage the real risk of corruption that exporting to risky markets brings, it needs to get serious about its due diligence, controls and sanctions for corrupt activity. It cannot wait for more scandals to emerge.”
A spokesperson for UKEF tells GTR: “While UKEF is not a law enforcement agency and has no statutory investigatory powers, we rigorously follow OECD standards and take all possible precautions to avoid supporting transactions that may be tainted by corruption.”
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