The Guardian says Rolls-Royce sent agent to India to retrieve document from tax office
Even as Rolls-Royce got a five-year reprieve from a British court this week from being convicted in criminal cases over graft charges, The Guardian said in a report on Friday that the defence and aerospace major sent an agent to retrieve an allegedly incriminating document from Indian tax authorities in 2006.
“The agent told the engineering giant that he paid a large sum to get the document from authorities, avoiding the company being banned from operating in India for 25 years. The revelation is contained in court documents filed by the Serious Fraud Office (SFO) as part of the admission by Rolls-Royce that it had acted corruptly in 12 countries, including India,” said the report.
An investigation by The Guardian and the BBC had reportedly uncovered leaked documents and testimony from insiders that suggested that Rolls-Royce may have benefited from the use of illicit payments to boost profits for years. Since then (October 2016), the agents have been the focus of large-scale probe by anti-graft agencies, notably in Britain and the US.
“According to the statement of facts on corruption, which was put to the court by the SFO and Rolls-Royce, the individual — identified only as ‘Intermediary 4’ in court documents — was the company’s agent on at least two major deals in India, including the sale of engines for BAE Systems Hawk aircraft in 2004,” The Guardian report said.
The report said Rolls-Royce agreed to have used ‘Intermediary 4’ as an agent for several years. In January 2006, Indian tax inspectors had visited the company’s Delhi office and removed a list of Rolls-Royce’s advisers. The list reportedly included several firms connected to ‘Intermediary 4’.
By February the same year, Rolls-Royce employees in London were discussing the retrieval of the list, because of concerns that an investigation could subject the company to “vigorous and possibly public hostile scrutiny”, said the news report.
The intermediary was told to retrieve the document from the tax authorities and by end-April, senior Rolls-Royce figures were informed that the situation had been resolved..
The next month, seven contracts were signed with India, during which time the company, over a period of five months, paid pounds 1.85 million to entities connected to the intermediary, The Guardian report added. The ties with the intermediary were terminated in 2011.
The Guardian report said a spokesperson for the company declined specific comment on the matter and said: “Rolls-Royce has committed to full ongoing co-operation with the authorities and must avoid the risk of prejudicing any potential future prosecutions.”
As per available information, Rolls-Royce agents were allegedly hired in 11 countries, besides India, namely Brazil, China, Indonesia, South Africa, Angola, Iraq, Iran, Kazakhstan, Azerbaijan, Nigeria and Saudi Arabia.
On Tuesday, Rolls-Royce Chief Executive Warren East had again apologised for such misconduct.
“The behaviour uncovered in the course of the investigations by the Serious Fraud Office and other authorities is completely unacceptable and we apologise unreservedly for it,” he said in a statement.
“This was unworthy of everything which Rolls-Royce stands for, and that our people, customers, investors and partners rightly expect from us.”
The company had also announced a deferred prosecution pact with the SFO, as per which it agreed to pay nearly 500 million pounds plus interest under a schedule lasting up to five years, plus a payment in respect of the costs involved.
Overall, the agreements with various agencies will result in the total payment of 671 million pounds by Rolls-Royce.