LONDON, March 5 Aerospace and defence company
Rolls-Royce, facing an investigation by Britain's
anti-fraud watchdog, said it had cut the number of middlemen it
uses as it steps up efforts to prevent bribery and corruption.
The British company said in its annual report on Wednesday
that as well as cutting down on the number of intermediaries it
uses, it has relaunched a 24-hour ethics telephone line for
staff and created a new role of head of risk training.
The world's second-largest maker of aircraft engines said in
December the Serious Fraud Office (SFO) had launched a formal
investigation into concerns of possible bribery and corruption
in China and Indonesia.
A year earlier, it had passed information to the SFO
relating to bribery and corruption involving intermediaries in
overseas markets, and said it could face prosecution.
Rolls-Royce is also facing an investigation into state-run
Hindustan Aeronautics Ltd's (HAL) orders from Rolls-Royce.
Investigations over overseas corruption and bribery are a
perennial risk facing makers of military equipment, given the
huge contracts and high secrecy in the defence sector.
Rolls-Royce tasked lawyer David Gold with leading a review
of its compliance procedures after the allegations emerged. He
published his interim report in July. A final version is
expected in due course.
"The number of intermediaries used by our businesses has
continued to fall dramatically during the year," Rolls said in
its annual report, adding that it was working to simplify its
anti-bribery policies in line with Gold's recommendations.
Rolls-Royce said last month that U.S. and European spending
cuts would halt profit growth in 2014, bringing to an end the
group's decade-long record of increasing annual profits.
A pay freeze for top management will accompany the group's
gloomier outlook for this year.
"There will be no increase in basic pay for most of the
senior leadership team in 2014," the company said.
Rolls's performance over the previous three years was,
however, strong enough to trigger rewards under a long term
The group's chief executive John Rishton earned a total of
6.2 million pounds ($10.3 million)in 2013, 36 percent higher
than the 4.6 million pounds he took home the year before on
account of the payout.