Business

Rolls-Royce 'made secret payments'

A Rolls-Royce made jet engine Image copyright Getty Images

An investigation by the BBC and The Guardian has found new evidence that suggests Rolls-Royce was involved in corruption.

Panorama understands that the company made secret payments of around £10m to an unregistered Indian agent.

And the programme has found evidence of a suspicious payment of cash that may have helped Rolls-Royce win a major contract for engines on Hawk aircraft.

Rolls-Royce says it has zero tolerance of bribery and corruption.

It is illegal to pay secret middlemen to win defence contracts in India, but Panorama's investigation suggests Rolls-Royce paid the money to companies linked to arms dealer Sudhir Choudhrie.

Mr Choudhrie is also on an Indian government blacklist of people suspected of "corrupt or irregular practice"'.

The Undesirable Contact Men list warns Indian civil servants and government ministers to take extra care when dealing with such "unscrupulous persons".

Mr Choudhrie's lawyers told the BBC he "has never paid bribes to government officials or acted as an illegal middleman in defence deals". They said he has "no knowledge of the contents" of the list.

Mr Choudhrie - who is a billionaire and lives in London - has been pictured collecting a business award from Prime Minister Theresa May.

Image copyright ALPHA PRESS
Image caption Sudhir Choudhrie is on an Indian government blacklist

He is an adviser on India to the Liberal Democrat leader Tim Farron and his family has donated more than £1.6m to the party.

The joint investigation has also found evidence of a suspicious payment that was made in cash.

It involves Mr Choudhrie's son, Bhanu, who accompanied an arms executive called Peter Ginger on a trip to Switzerland in 2007.

During the trip, Mr Ginger made a cash payment amounting to hundreds of thousands of pounds into a secret bank account.

The account was opened in the name of "Portsmouth" and bank documents seen by Panorama later showed a balance of more than 1m Swiss francs.

Mr Ginger was a key negotiator on the sale of Hawk aircraft to the Indian government. All of the planes had Rolls-Royce engines and the deal was worth around £400m to the company.

Bhanu Choudhrie's lawyers told the BBC he has never been paid to secure deals for Rolls-Royce in India, including the sale of Hawk jets.

Image caption India bought 123 Hawk jets with Rolls-Royce engines

"Mr Choudhrie has never paid any bribe to Mr Ginger or anyone else," his lawyers said. "Mr Choudhrie has no knowledge of what bank accounts have been set up or operated by Mr Ginger or what sums (if any) he has deposited in them in cash."

Mr Ginger told the BBC he has never acted for Rolls-Royce or had any financial dealings with them. He says he has "never taken nor paid any bribes".

In 2014, both Sudhir and Bhanu Choudhrie were arrested as part of the Serious Fraud Office investigation into Rolls-Royce. Both were released without charge.

Rolls-Royce says it is "fully co-operating with the authorities" and "cannot comment on ongoing investigations".

Rolls-Royce, which employs 23,000 people in the UK, makes engines for commercial and military aircraft, along with power systems used by ships, oil rigs and trains.

The world famous car business of the same name was split from the aero engine company in 1973, after it had been nationalised by the then Conservative government under Ted Heath to stop the company going bust.

Since 1998 the Rolls-Royce car brand has been owned by BMW which now makes the cars at Goodwood in Sussex.

Panorama has also been told by a Brazilian prosecutor that Rolls-Royce is co-operating with an investigation looking at bribery allegations in Brazil.

It is alleged Rolls-Royce paid bribes to win a $100m contract to supply power systems to the Brazilian state oil company Petrobras.

The arms dealer welcomed by the establishment

Billionaire Sudhir Choudhrie has been welcomed by the British establishment.

His family's Stellar International Art Foundation owns more than 600 rare works of art by artists including Picasso, Renoir and Andy Warhol.

He has been photographed receiving a business award from Theresa May and his family has given more than £1.6m to the Liberal Democrats. The 67-year-old is now an adviser to Lib Dem party leader Tim Farron.

Mr Choudhrie and his family run a global business empire that includes hotels, healthcare and aviation.

Read more about Sudhir Choudhrie

Pedro Barusco was one of the Petrobras executives who allegedly received illegal payments. In official documents seen by the BBC, he told prosecutors the Rolls-Royce payments were split up and that he received at least $200,000.

Rolls-Royce says it has completed a thorough review of its anti-corruption policies, including the use of advisers and intermediaries.

The company said: "We have made it clear that Rolls-Royce will not tolerate business misconduct or inappropriate behaviour of any kind and in recent years we have intensified our focus on ethics and compliance, which are foundations of our culture.'

The BBC understands there are more than 30 investigators working on a UK Serious Fraud Office investigation. Rolls-Royce could face large fines and employees - past or present - could face jail sentences if found guilty of any wrongdoing.

There is a separate investigation into the company in the United States.

Panorama: How Rolls-Royce Bribed Its Way Around The World is on BBC One at 20.30 and available on the BBC iPlayer afterwards.

Related Topics

More on this story