Former Rolls-Royce managers plead guilty to US bribery charges

17th November 2017

By: Bloomberg

  

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Two former Rolls-Royce executives pleaded guilty to US charges that they orchestrated international bribes at the engine maker for more than a decade.

The cases, also involving three other individuals, focus on efforts to secure a $145-million contract to power a gas pipeline from Kazakhstan to China. The action comes about ten months after Rolls-Royce agreed to pay $800-million to resolve probes in the US, the UK and Brazil. The bribes occurred from 1999 to 2013 in Africa, the Middle East and South America, prosecutors said.

The guilty pleas were unsealed on November 7 in a federal court in Ohio. James Finley, formerly responsible for energy sales at Rolls-Royce, pleaded guilty in July to two charges, including conspiring to violate the foreign corruption law. Keith Barnett, also once a senior executive, admitted to a single conspiracy charge.

Rolls-Royce said it was committed to “full ongoing cooperation” with the US Department of Justice (DoJ), but could not comment on actions against individuals, adding that the energy business involved had been divested in 2014.

Aloysius Zuurhout, a former employee at a Dutch subsidiary of Rolls-Royce, also admitted to a single charge, as did Andreas Kohler, a consultant to Asia Gas Pipeline, a venture between China and Kazakhstan that helped facilitate bribes to at least one Kazakh official. Lawyers for the four men did not respond to requests for comment.

Petros Contoguris, a Turkey-based adviser on oil and gas projects, was indicted on 19 charges, including arranging corrupt payments and money laundering. RollsRoyce made payments to his company knowing that funds would be shared with a high-ranking Kazakh official of KazMunayGas National, according to prosecutors. Efforts to identify counsel for Contoguris were unsuccessful.

The investigation started in 2012 after allegations of bribery at Rolls-Royce emerged in various Internet postings, provoking the company to tell the UK’s Serious Fraud Office (SFO) about them. Rolls-Royce started an internal inquiry and, in 2013, the SFO opened a formal probe which the agency said, last week, was continuing.

Cooperation from the engine giant with the SFO was key in the decision to offer the company a deferred-prosecution agreement, lawyers for the agency told the court. The SFO reviewed more than 30-million documents.

The charges reflect the DOJ’s push to prosecute individuals for corporate misconduct, which was prioritised in the waning years of the Obama administration. This year, at least 16 people have been convicted of charges tied to violations of the U.S. Foreign Corrupt Practices Act (FCPA).

The convictions are “another example of the Criminal Division’s commitment to holding individuals – and not just corporations – accountable for violating the FCPA”, said acting Assistant Attorney-General Kenneth Blanco.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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