Rolls-Royce to Tighten Sales Agent Policies Amid Fraud Review
Stock Chart for Rolls-Royce Holdings PLC (RR/)
Rolls-Royce Holdings Plc (RR/), Europe’s largest maker of commercial aircraft engines, said it will further tighten controls over sales agents as U.K. regulators review alleged wrongdoing in Asian deals.
“Work is under way to improve the process for appointment or renewal of intermediary advisers and consultants,” Ian Strachan, chairman of the London-based company’s ethics committee, said in Rolls’s annual report. Additional training on anti-bribery and corruption policies will be undertaken worldwide this year, he said.
Rolls-Royce disclosed on Dec. 6 that it had notified the U.K. Serious Fraud Office of “matters of concern” over activities in China, Indonesia and other markets following an internal review. It named David Gold, a member of the House of Lords and previously a partner at the Herbert Smith LLP law firm, on Jan. 10 to review anti-corruption procedures.
“The ethics committee spent a good deal of its time in 2012 dealing with concerns about bribery and corruption involving intermediaries in overseas markets,” Chairman Simon Robertson said in the report. “The board is united in its resolve not to accept any behavior that undermines this group’s future success.”
Strachan said the “enhanced controls” being developed will address what types of service intermediaries provide, the “value for money” in using them, and background on the person including proposed and past payment information. The company has updated its guidance on anti-bribery rules several times since 2008, he said.
Chief Executive Officer John Rishton said last month that there has been no effect on deal flow from the SFO disclosure.
Rolls-Royce shares, which fell on the disclosure of the fraud review, have risen more than 12 percent since the concerns became public. The stock fell 0.7 percent to 1021 pence at of 11:15 a.m. in London, valuing the business at 19 billion pounds.
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