A UK probe into suspected bribery at Rolls-Royce, the engineering group,
has spread to Nigeria in the latest blow to a company already facing
investigations in multiple countries.
Britain’s Serious Fraud Office is examining Rolls-Royce’s former energy
operations in the oil-rich west African state, as part of a wider inquiry
that also covers Brazil, Indonesia and China, the Financial Times has
learnt.
The addition of Nigeria underscores the seriousness of allegations against
Rolls-Royce and highlights the growing focus by western investigators on
suspected misconduct by businesses outside their home states.
The expanded probe comes as Rolls-Royce seeks to re-establish credibility
with investors after five profit warnings in less than two years. It also
throws light on another side to graft problems in countries such as
Nigeria, which David Cameron, UK prime minister, unguardedly declared to
be “fantastically corrupt” in remarks overheard last week.
Both the Serious Fraud Office and Rolls-Royce said they did not comment on
ongoing investigations.
The company added that it was co-operating with relevant authorities. “We
have made it clear that Rolls-Royce will not tolerate business misconduct
of any kind,” it said.
Rolls-Royce was first approached by the SFO in 2012 regarding allegations
of corruption in Indonesia and China. The company then appointed law firm
Debevoise & Plimpton to investigate. Certain businesses in those countries
and others were “red flagged” and files were passed to the SFO, which
launched a criminal investigation a year later. The US Department of
Justice is also looking at the issue.
Warren East, the chief executive appointed last July, has said unethical
behaviour will not be tolerated and the group has cut the number of
third-party agents used abroad significantly over the past few years.
The SFO Nigeria investigation is examining whether Rolls-Royce and its
agents were involved in any bribery of government officials up to the
year 2013 in connection with energy tenders in the country and a Nigerian
company called PSL Engineering & Control, people familiar with the
situation said.
PSL acted for Rolls-Royce on projects in Nigeria to supply gas turbines to
power plants in the oil states of Bayelsa and Delta, according to PSL’s
website.
Rolls-Royce sold its energy business to Siemens of Germany in 2014, after
the period under investigation, and it no longer does business with PSL.
A PSL official who answered the phone at the company’s Lagos headquarters
said he was not aware of any investigation. He said PSL would deal with
emailed questions from the FT, but the company has not yet responded.
One focus of the SFO investigation is a Delta state government project
known as the Oghareki power plant, the FT has learnt. The venture has cost
more than $100m but has never been completed and has been plagued by
corruption claims, according to Nigerian media reports.
The project was awarded in 2009 to Davnotch Nigeria, a company founded by
Victor Ochei, a flamboyant former speaker of the Delta state house of
assembly. Mr Ochei’s website describes him as an “uncommonly well-rounded
man of letters, experience and character with well-honed leadership skills
and a passion for public service”.
Norbert Osodi, Davnotch’s managing director, said by email that the
company was not aware of the SFO investigation. He said Davnotch had won
the Oghareki tender through proper processes. He added that past
allegations of corruption against the project were “not credible” and had
been mounted by Mr Ochei’s political enemies.
Mr Osodi said there was no conflict of interest between Mr Ochei’s
simultaneous holdings of a majority shareholding in Davnotch and his
political seat, because the parliamentary position was part-time. Mr Ochei
divested his interest in Davnotch in June 2011, when he became house
speaker.
Attempts to reach Mr Ochei were unsuccessful. Neither he nor the Delta
state government responded to requests for comment submitted through their
websites.