Monday 16 January 2017 5:17 pm

Rolls-Royce to pay £671m to settle corruption probes with three global fraud squads

Rolls-Royce is in the final stages of locking down corruption and bribery probe settlements worth £671m in total with three authorities around the world, with the lion's share going to the UK's fraud squad. 

The British engineering company today announced today it has reached in principle a deferred prosecution agreement (DPA) with the Serious Fraud Office (SFO), with the two parties heading to a London court tomorrow morning to seek final approval from a judge.

Rolls-Royce said it had also reached a DPA – which is essentially a type of plea deal – with the US Department of Justice (DoJ) and a leniency agreement with Brazil's Ministerio Publico Federal (MPF).

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If the UK DPA goes ahead as planned, Rolls-Royce will pay the SFO £497.3m, plus interest, to be paid out over a period of up to five years, along with the fraud squad's costs. 

Under the terms of the settlements with the other two countries, the engine maker will pay approximately $169.9m (£140.8m) to the DoJ and $25.6m to the MPF.

The investigations stemmed from claims of possible bribery and corruption in the company's overseas markets, China and Indonesia in particular.

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The engineering giant, which said it had been fully cooperating with the authorities and would continue to do so, noted it would pay out £293m in total in the first year of the three agreements.

The company also said it would give an update of how the settlements would affect it financially when it announced its full-year results on 14 February, but early indications pointed towards a good year, with cash and profits likely to be ahead of expectations.

The SFO said it could not provide further information until after tomorrow's court hearing. Although the UK's fraud watchdog formally announced its investigation in December 2013, it had been following up an internal probe by the company for around a year beforehand. 

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DPAs are a relatively new tool for UK prosecutors. If all goes according to plan tomorrow, this will be the third ever secured by the SFO, which nailed down its first DPA in November 2015.