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Catherine, Duchess of Cambridge, officiates at the launch of the first aero engine and fan blades produced in Singapore at the Rolls Royce Seletar campus, Sept. 12, 2012. (Gary Goh/The New Paper/REUTERS)
Catherine, Duchess of Cambridge, officiates at the launch of the first aero engine and fan blades produced in Singapore at the Rolls Royce Seletar campus, Sept. 12, 2012. (Gary Goh/The New Paper/REUTERS)

Rolls-Royce faces U.K. bribery probe Add to ...

One of the world’s largest makers of jet engines, Rolls-Royce Holdings PLC., is being investigated by British authorities over allegations of bribery and corruption in overseas markets.

The company announced Thursday that it had turned over information to Britain’s Serious Fraud Office after official there requested information “about allegations of malpractice in Indonesia and China.”

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“Investigations by Rolls-Royce have identified matters of concern in these, and in other overseas markets,” the company added. “The consequence of these disclosures will be decided by the regulatory authorities. It is too early to predict the outcomes, but these could include the prosecution of individuals and of the company. We will co-operate fully.”

Rolls-Royce is the world’s second-largest maker of jet engines for civil and military use (it sold off the car business years ago). The company serves roughly 500 airlines, has 40,000 employees and generates nearly $20-billion in annual revenue. It has been on something of a comeback lately as airplane makers such as Boeing Co. and Air Bus ramp up production. In October, Rolls signed a $2.6-billion order with Singapore Airlines to supply engines for 25 Airbus 350 aircraft.

The company said Thursday that the bribery investigation is focussing on “intermediaries in overseas markets”. It is not uncommon for companies to hire local agents to help win contracts in foreign markets, but these agents can cause problems.

SNC-Lavalin Group Inc. is in the midst of a growing scandal over $56-million in payments to commercial agents the company alleges did not exist. The money has also vanished, SNC has said, and a former vice-president in charge of global construction projects, Riadh Ben Aissa, is being held in Switzerland as part of an investigation into allegations of corrupt payments in North Africa. That probe has also reportedly turned up an additional $139-million in questionable payments by SNC to offshore entities the used to win contracts in Libya. Mr. Ben Aissa and SNC’s former chief executive officer, Pierre Duhaime, have also been charged in Montreal over allegations of fraud at a $1.3-billion Montreal hospital development. An SNC subsidiary is also under investigation over allegations of bribery in Bangladesh involving a $10-million bridge contract.

In 2011 Calgary-based Niko Resources paid a $9.5-million fine for bribing an official in Bangladesh. And Canadian executive Nazir Karigar is under investigation in Indi over allegations of bribery in India.

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