RR. Rolls-royce Holdings Plc

By Robert Wall 

A U.K. court on Tuesday approved a deferred prosecution agreement between Rolls-Royce Holdings PLC and Britain's Serious Fraud Office to settle a four-year corruption investigation.

U.K. fraud investigators said Rolls-Royce engaged in illegal business practices over a period spanning three decades and activities in seven markets as the British blue-chip company admitted guilt in the case. U.S. authorities found misconduct in several additional jurisdictions.

Rolls-Royce on Monday said it struck similar agreements with U.S. and Brazilian authorities and would pay more than $800 million in fines. Shares in Rolls-Royce, which is no longer affiliated with the luxury car maker, rose 4.44% in London as the controversy hanging over the company for years neared an end.

The Serious Fraud Office said the agreement covers 12 counts of conspiracy to corrupt, false accounting and failure to prevent bribery. Wrongdoing took place in business dealings in Indonesia, Thailand, India, Russia, Nigeria, China and Malaysia, the U.K. government said.

Andrew Weissmann, chief of the Justice Department's fraud section, said "for more than a decade, Rolls-Royce repeatedly resorted to bribes to secure contracts and get a competitive edge in countries throughout the world."

The U.S. government said bribery on Rolls-Royce contracts also took place in Iraq, Angola, Azerbaijan and Kazakhstan in violation of the U.S. Foreign Corrupt Practices Act. "The global nature of this crime requires a global response," Mr. Weissmann said, praising the cooperation with Brazilian and British authorities.

The SFO found Rolls-Royce misconduct in the sale of commercial aircraft engines for which the British company is best known. Rolls-Royce is a major engine supplier to Airbus SE and Boeing Co., the two largest airliner makers. The SFO said misconduct involved the sale of Rolls-Royce engines for Airbus A330 widebody aircraft in China and Indonesia. The plane maker hasn't been implicated.

Corruption also was found involving sales of the company's defense aerospace and former energy business.

As part of a DPA, governments agree to set side prosecution of the company as long as it takes a number of remedial actions. If the company doesn't honor the conditions, the prosecution may resume. In this case the terms include paying financial penalties and agreeing to cooperate with future prosecutions of individuals.

The SFO said it was its "highest ever enforcement action" against a British firm for criminal conduct.

Rolls-Royce said some employees involved in the actions had left the company and that implicated intermediaries would no longer be used. The company has cut back more broadly on use of middlemen following an ethics review spurred by the SFO investigation.

The SFO said Rolls-Royce fired six employees and 11 left the company amid a disciplinary review. Others were sanctioned.

The agreements with the three governments suspend prosecution of the company as long as it meets certain criteria, including paying the fine and supporting future prosecution of individuals.

Rolls-Royce Chairman Ian Davis said the company wanted to emerge as a more trusted, resilient and better managed business that 'wins right' every time."

Write to Robert Wall at robert.wall@wsj.com

(END) Dow Jones Newswires

January 17, 2017 14:32 ET (19:32 GMT)

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