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Last updated: December 6, 2012 11:35 pm
The results of Rolls-Royce’s internal investigation into potential bribery in Asia adds one more high-profile case to the burgeoning in-tray of the Serious Fraud Office.
The SFO, which is sharing information on Rolls-Royce with the US Department of Justice, will have to decide whether to ratchet up what hitherto has been an internal company probe into a more official criminal investigation, as it did in August when it announced a formal inquiry into GPT, the EADS subsidiary.
A formal criminal investigation means that the SFO can use powers such as interviewing people under caution, undertaking searches and demanding documents, rather than relying on voluntary admissions from the company.
If the SFO does opt for that route, it will be one more headline-making corruption investigation with links to Asia. As well as the probe into GPT, which involves alleged bribery in Saudi Arabia, the SFO announced this summer that it was investigating payments between Barclays and Qatar as part of the bank’s 2008 cash call.
The SFO is also prosecuting a British-Canadian businessman, Victor Dahdaleh, accusing him of bribing a member of the Bahraini royal family to win aluminium contracts. Mr Dahdaleh denies wrongdoing and will stand trial in April.
Unfortunately for the SFO, a Cumbrian businessman, who the SFO argued had bribed Vietnam’s former central bank governor by funding his son’s UK university education, was acquitted this week in an unrelated case.
The alleged wrongdoing in Rolls-Royce’s case took place both before and after the July 2011 implementation of the Bribery Act, which gives the SFO unprecedented powers to prosecute bribery no matter where in the world it takes place, as long as the company or individuals have a link to the UK.
A Bribery Act case would theoretically make the SFO’s task easier than when it investigated BAE Systems. After political pressure and the company’s $400m deal with US authorities, the SFO eventually prosecuted the company for one count of false accounting in 2010.
Another high-profile investigation will be a drain on the SFO’s resources: its budget was slashed from £52m in 2008 to £32m this year, and it had to secure an additional £3m in order to open a criminal investigation into potential manipulation of Libor, the interbank borrowing rate. Forty SFO staff are working on the Libor probe.
Meanwhile, the agency had to find a new head for its anti-corruption team after Satnam Tumani, the previous team leader, left for Kirkland & Ellis. He has been replaced by Matthew Wagstaff, who was formally at the Crown Prosecution Service.
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