Rolls-Royce Bribery Allegations: Company Used Middlemen, Bribes To Land Big Deals

Britain’s biggest manufacturing multinational Rolls-Royce plc allegedly hired middlemen to broker lucrative deals in at least 12 countries, even resorting to bribery in some cases, British media reported Monday.

Rolls-Royce, worth an estimated 13 billion pounds (approx $16 billion), sells turbines and engines for commercial and military aircraft. It no longer manufactures cars, having sold that part of its business to BMW nearly two decades ago. An investigation conducted by the BBC and the Guardian found the company used illegal payments to boost its business. Its findings alleged the company hired agents in Angola, Azerbaijan, Brazil, China, India, Indonesia, Iran, Iraq, Kazakhstan, Nigeria, Saudi Arabia and South Africa. Rolls-Royce is under scrutiny for this alleged ring of middlemen by anti-corruption agencies in the United Kingdom and the United States.

“Concerns about bribery and corruption involving intermediaries remain subject to investigation by the Serious Fraud Office [SFO] and other authorities. We are fully cooperating with the authorities and we cannot comment on ongoing investigations,” a Rolls-Royce spokesman told the Guardian.

The company allegedly paid Sudhir Choudhrie, an unregistered Indian agent, about 10 million pounds (approx $12 million), which may have helped it secure a deal to provide engines for the Hawk aircraft, manufactured by BAE Systems. Paying agents to acquire defense deals is illegal in India but the investigation found Rolls-Royce paid money to companies affiliated to the arms dealer.

Choudhrie, who lives in London and is on an Indian government blacklist of people suspected of corruption, is also adviser on Indian affairs to the Liberal Democrats party leader Tim Farron in the U.K. He has donated over 1.6 million pounds to the party. The agent and his son, Bhanu, were arrested and questioned by the SFO in 2014 over charges of bribery but were released when they denied any wrongdoing.

Choudhrie’s lawyers told the BBC he “has never paid bribes to government officials or acted as an illegal middleman in defense deals,” adding that he had “no knowledge of the contents” of the Indian government blacklist he is supposedly on.

The investigation revealed that former BAE executive Peter Ginger who accompanied Bhanu Choudhrie on a trip to Switzerland in 2007, made a cash payment to the tune of hundreds of thousands of pounds to a secret bank account. The BBC said the account was opened under the name “Portsmouth” and had a balance of over 1 million Swiss francs. Ginger was incidentally one of the key negotiators in the sale of the Hawk aircraft to the Indian government, a deal worth at least 400 million pounds to Rolls-Royce.

Bhanu Choudhrie’s lawyers said he was never paid to broker deals for Rolls-Royce in India and denies involvement in the Hawk aircraft deal.

“Mr. Choudhrie has never paid any bribe to Mr. Ginger or anyone else,” his lawyers told the BBC. “Mr. Choudhrie has no knowledge of what bank accounts have been set up or operated by Mr. Ginger or what sums [if any] he has deposited in them in cash.”

Ginger also denied any involvement with Rolls-Royce, saying he never had any financial dealings with the company and he had “never taken nor paid any bribes.”

Over 30 SFO investigators are working on the Rolls-Royce case. If the company is found guilty of committing any malpractice, it could face massive fines and its executives could go to jail.