Shares in embattled engineering giant Rolls-Royce opened 0.8 per cent lower this morning, after it was revealed it has been dragged into a multi-billion dollar bribery scandal by Brazillian state oil producer Petrobras. The company has been accused of paying out bribes in exchange for contracts to build gas turbines for oil platforms.
The accusations were unveiled after a Brazillian court released 600 pages of documents detailing testimony by Pedro Barusco, a former director of Sete Brazil, a company in charge of supplying drilling rigs to Petrobras, who has become a key informant on the company.
In the documents, Barusco alleges that Rolls-Royce paid him $200,000 of bribes in exchange for a $100m contract to build gas turbines for one of Petrobras' oil platforms.
Rolls-Royce joins Dutch offshore oil vessel supplier SBM Offshore and Singaporean firms Keppel Corporation and Sembcrop Marine as companies under investigation for allegations surrounding the bribes-for-contracts scheme, which is thought to have taken place over the past decade.
Today a Rolls-Royce spokesman said: "We want to make it crystal clear that we will not tolerate improper business conduct of any sort and will take all necessary action to ensure compliance. We have not received details of the allegations made in recent press reports, nor have we been approached by the authorities in Brazil. We have always been clear that we will not tolerate improper business conduct of any sort and will take all necessary action to ensure compliance, including co-operating with authorities in any country.”
The allegations come days after Rolls-Royce published figures showing sales at the company fell for the first time in a decade in 2014. Hit by the twin challenges of falling oil prices and sanctions against Russia, the company is in the middle of a wide-ranging restructuring, which is expected to result in the loss of 2,600 jobs.
On Friday chief executive John Rishton said pre-tax profits were likely to be hit again in 2015, falling as much as four per cent to £1.4bn-£1.55bn.
To compound things further, the company is also under investigation by the Serious Fraud Office (SFO) over accusations of bribery and corruption in Indonesia and China.
In December 2012 the SFO said it had been passed information by Rolls-Royce "relating to concerns about bribery and corruption involving intermediaries in overseas markets". In September David Green, the agency's chief, warned "there will be more arrests".