Rolls-Royce has appointed
the senior City lawyer investigating the Conservative party's
cash-for-access scandal to review its anti-corruption procedures
following bribery allegations involving the aircraft engine manufacturer
in Indonesia and China.
Lord Gold, a conservative
peer and former head of litigation at City law firm Herbert Smith is to
lead a review of the industrial group's compliance procedures after
claims about its conduct in emerging markets. Lord Gold has a track
record in scrutinizing allegations of illicit practices at
organizations, having been appointed by David Cameron last year to
investigate the Conservative party's fundraising methods after the then
party co-treasurer, Peter Cruddas, was filmed boasting that senior
donors could dine with the prime minister.
Rolls-Royce's guidelines
are in the spotlight after the group admitted last month that it was
investigating allegations of malpractice in China, Indonesia and other
unspecified overseas markets. The allegations were first brought to the
attention of the Derby-based group by the Serious Fraud Office.
At the time of the
announcement Rolls-Royce emphasized its co-operation with the SFO,
pointedly condemning any "improper business conduct of any sort".
However, a former Rolls-Royce employee who blew the whistle on the
Indonesian allegations, Dick Taylor, said the claims were "just one
example" of corruption at his former employer, adding that some cases of
malpractice took place as late as 2010.
Announcing the
appointment of Lord Gold, Rolls-Royce said: "He is one of the UK's most
senior litigators and has extensive experience working at the highest
levels with corporations, governments and regulators around the world."
Having left Herbert Smith after 37 years, including a spell as its
senior partner between 2005 and 2010, Lord Gold set up David Gold &
Associates, which is advertised on its website as a provider of
"high-level strategic litigation advice, particularly in relation to
settlement".
According to the website,
Gold's pedigree includes working with the US Department of Justice as
"corporate monitor" of BAE Systems, the UK defence contractor that has
also faced corruption allegations in emerging markets.
Rolls-Royce said last
month that it had appointed an external law firm, Debevoise &
Plimpton, to conduct its own investigation into the concerns raised by
the SFO. The group said the inquiry had found "matters of concern" in
Indonesia, China and other unspecified markets. The SFO has yet to
declare whether it will launch a formal investigation.
However, in the meantime,
allegations related to Rolls-Royce's conduct in China and Indonesia
have emerged on the internet, comprised of postings by Taylor and an
anonymous blogger operating under the pseudonym "Soaringdragon". Taylor
had alleged that that Tommy Suharto, the son of the former Indonesian
president, was paid $20m (£12m) by Rolls-Royce and given a Rolls-Royce
car to persuade the Garuda airline to procure Trent 700 engines in 1990.
Soaringdragon claimed that it paid that it paid bribes to an executive
involved with two Chinese airlines, related to deals worth a total of
$2bn (£1.25bn) with Air China in 2005 and China Eastern in 2010.
Speaking last month, the
Rolls-Royce chief executive, John Rishton, said: "I want to make it
crystal clear that neither I nor the board will tolerate improper
business conduct of any sort and will take all necessary action to
ensure compliance. This is a company with exceptional prospects and I
will not accept any behaviour that undermines its future success."
Source: http://www.guardian.co.uk
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