An employee fits the nose cone to a Trent 700 aircraft engine on the production line at the Rolls-Royce Holdings Plc factory in Derby, U.K., on Wednesday, Aug. 19, 2015. Rolls-Royce's XWB engine developed for the Airbus A350 should bring in twice the cash flow than the existing Trent 700 model on the Airbus A330, Chief Executive Warren East said in July. Photographer: Chris Ratcliffe/Bloomberg
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British investigators have opened “fresh lines of inquiry” into bribery and corruption at several companies, thanks to evidence gathered in a four-year investigation into illegal behaviour at Rolls-Royce.

Ben Morgan, joint head of bribery and corruption at the Serious Fraud Office, told the Financial Times that information collected on a network of corrupt middlemen operating on behalf of Rolls-Royce and other companies was being pieced together “not just in the aerospace or energy sectors, but in other cases”.

“You start to look at how the web reaches out into other companies,” he added. “We don’t think we have caught the one bad apple here at all. Other companies should be concerned.

“Boards have a decision to make — do they continue to hide conduct or, like Rolls-Royce did, do they have the integrity to confront it?”

The SFO declined to specify which companies it was scrutinising.

The agency concluded the biggest investigation in its history this week when Rolls-Royce agreed to pay £671m in fines to regulators in the US, UK and Brazil after the manufacturer of engines for the aerospace and energy industries admitted to bribery and corruption charges in more than seven countries over more than 20 years.

Mr Morgan said that the SFO was now determined to bring individuals to account in the Rolls-Royce case, and charging decisions are expected to be made in the coming months. “It is an urgent matter for us now,” he added.

Sir John Rose, Rolls-Royce chief executive between 1996 and 2011 and once hailed as Britain’s most inspirational industrialist, is under pressure after a court ruling in the corruption case on Tuesday raised questions over his conduct.

Sir Brian Leveson, the senior judge overseeing the Rolls-Royce case, said that the company’s leadership had decided not to notify authorities about concerns over potential corruption as far back as 2010. A lawyer for Sir John at WilmerHale, the law firm representing him in relation to the SFO probe, declined to comment.

Successful prosecutions of individuals in the Rolls-Royce case could be crucial to the reputation of a newly assertive SFO under David Green, who was appointed director-general in 2012.

Sir John Rose, chief executive of Rolls-Royce.
Former Rolls-Royce CEO Sir John Rose

The agency has been criticised in the past for failing to charge directors at companies it has investigated for corruption.

In the SFO’s probe into Libor rate rigging, it won the conviction of only of a handful of mid-level traders at Barclays and UBS. One of them, Tom Hayes, said that the SFO should pursue senior executives.

Mr Green said that the agency could only take action when the evidence was strong enough. “We don’t act on the basis of reputation, or hoping to curry favour, or hoping to get good headlines. We act on the basis of evidence,” he told the Financial Times.

Under a deferred prosecution agreement with the SFO, Rolls-Royce will not be prosecuted as long as it implements and abides by new compliance measures.

Mr Morgan stressed that the company’s extensive co-operation, handing over millions of documents and waiving the right of legal privilege, had contributed to the decision to settle rather than prosecute the company.

Mr Green said that the SFO’s annual budget of £36m was not a constraint on its efforts to hunt down corruption.

In the Rolls-Royce investigation, the SFO had been “more than the equal of” the squadron of lawyers acting for Rolls-Royce, Mr Green said.

Rolls-Royce spent £130m on legal costs and implementing new compliance procedures. The SFO, by contrast, spent £13m.

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