Former Rolls-Royce boss questioned in corruption inquiry

Sir John Rose, the former chief executive of Rolls-Royce, has been questioned under caution as part of the Serious Fraud Office’s investigation into a corruption scandal at the engineering group.

Rose is one of a “large number” of former Rolls-Royce executives to have been interviewed under caution, according to sources familiar with the inquiry. This involves legal rights being read out to the individual being questioned and is not the same as being questioned as a witness. The interviews are often voluntary, with the individual invited to attend by investigators.

Rose also left his position as a director of two organisations in recent weeks. He resigned as director of the Eden Trust, owner of the Eden Project in Cornwall, on 27 January, just 10 days after Rolls-Royce and the SFO announced the company had agreed to pay £671m to settle allegations it bribed middlemen around the world between 1989 and 2013.

Rose was appointed as an Eden Trust director in August 2006. The Eden Project said: “The Eden Project can confirm that Sir John Rose has completed his term with the Eden Trust and retired as a trustee after more than 10 years on the board. We are very grateful to Sir John for his many years of support and guidance.”

Rose also resigned as a director of Ombu, which invests in industrial technology companies, on 30 November, according to records at Companies House. Mark King, the former head of civil aerospace at Rolls-Royce, also stepped down as chairman of Open Energi, one of the companies Ombu has invested in, on 23 January. A company spokesman said King would remain on the board as a non-executive and that the change was part of a management reshuffle.

The £671m payment by Rolls-Royce, of which nearly £500m will be paid to UK authorities, is the biggest ever penalty for criminal conduct for a British company.

In his judgment in the high court on the deferred prosecution agreement, the settlement between the SFO and Rolls-Royce, Sir Brian Leveson said the company had conducted “the most serious breaches of the criminal law in the areas of bribery and corruption” and that some of the allegations “implicated senior management and, on the face of it, controlling minds of the company”.

Leveson said the charges against Rolls-Royce were “devastating and of the very greatest gravity”. He also said in his judgment that the company had been aware of corruption allegations in 2010 but decided not to notify the authorities.

However, the judge praised the cooperation of the company’s existing management with the investigation and said all the key players involved in the scandal had left.

David Green, the SFO director, has said it intends to announce within the next few months whether it will bring charges against individuals.

The questioning of Rose, who ran the aircraft engine maker from 1996 to 2011, was first reported by the Financial Times.

The SFO declined to comment on Rose or confirm how many Rolls-Royce executives had been interviewed. Rose denies any wrongdoing and has not been charged. He declined to comment, as did the law firm representing him, WilmerHale.

Stephen Pollard, the lawyer representing Rose, previously defended the Barings Bank rogue trader Nick Leeson and property tycoon Vincent Tchenguiz in his successful fight against the SFO.

While boss of Rolls-Royce, Rose was regarded as a captain of industry and a leading figure in British business. When Rose announced his retirement from Rolls-Royce in 2010, Sir Vince Cable, then the business secretary, described him as a “champion of UK advanced manufacturing” and praised the “huge contribution he’s made to strategic thinking both within business and government on growing global market share”.

Rolls-Royce will be in the spotlight again next week when the FTSE 100 company publishes its full-year results. Warren East, the current chief executive, has already apologised for the scandal and said the behaviour uncovered by the SFO and other authorities was “completely unacceptable”.

East is likely to face further questions about the scandal, including what changes have been made at Rolls-Royce and whether the company could lose contracts as a result of its damaged reputation.

Source: The Guardian