by Christopher Freeburn | December 6, 2012 11:26 am
Rolls-Royce (PINK:RYCEY) is facing scrutiny by British regulators over allegations that the iconic car and aircraft engine maker had engaged in overseas corruption.
The U.K. Serious Fraud Office has demanded that the company launch an internal investigation relating to possible bribes paid to government officials in a number of foreign countries, including Indonesia and China, and disclose the results, Reuters noted.
Shares of Rolls-Royce fell more than 2% in over-the-counter trading in New York on Thursday morning.
Unnamed sources said the inquiry was examining corruption claims from some time ago and that American regulators had been notified. British regulators have not revealed the exact allegations under investigation.
Company CEO John Rishton promised full cooperation in the government’s inquiry and insisted that he would not tolerate corrupt business practices. He also warned that the investigation could result in criminal charges against Rolls-Royce and some of its executives.
Under British law, U.K. companies operating overseas can be penalized with unlimited fines for failing to prevent bribery or failing to implement policies to insure that corrupt practices do not occur.
A number of companies have faced allegations of overseas corruption in recent years. In 2010, aerospace giant BAE Systems (PINK:BAESY) was fined $450 million by American and British regulators over alleged bribery in its contract dealings with Saudi Arabia, among other countries.
Earlier this year, American retailer Wal-Mart (NYSE:WMT) fell under scrutiny for alleged bribery at its Mexico unit.
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