Rolls-Royce Loses $5.7bn to Corruption in Nigeria

ibrahim-maguIbrahim Magu
  • Rolls-Royce Loses $5.7bn to Corruption in Nigeria, others

Rolls-Royce has reported £4.6bn ($5.7bn) annual loss largely due to currency depreciation and payment of $808m fine to affected countries where it was involved in corrupt practices.

According to a news agency, The Nerve, the motoring company had last month (January) apologised for the corruption case that centred around allegations that the group hired middlemen to broker deals in a number of countries including Nigeria, South Africa and Angola.

In 2016, Rolls-Royce and its agent company in Nigeria, PSL Engineering and Control, ordered to supply gas turbines to power plants in the oil states of Bayelsa and Delta, were accused of various projects, especially to Oghareki power plant in Delta that cost $100m but was never completed.

Findings from an investigation conducted by the Guardian and the British Broadcasting Corporation had uncovered leaked documents and testimony from insiders that suggested that Rolls-Royce might have benefited from the use of illicit payments to key officials and politicians to boost profits for years.

The Guardian/BBC investigation, called Panorama, revealed that Nigeria, Angola and South Africa were part of the 11 countries the company had hired intermediaries.

The investigation also revealed Rolls-Royce hired Fana Hlongwane, who is close to South Africa’s ANC government, in 2008 to help broker deals in the country.

Although, Nigeria or South Africa have yet to get any amount from the agreement, the company revealed last month it had agreed to pay £671m to settle corruption cases with the United Kingdom, the United States and Brazilian authorities.

The company’s Chief Executive, Warren East, took the helm in 2015 and has been tasked with turning around the company.

East said, “While we have made a steady start, more remains to be done. The addition of new management and a renewed focus within the business leadership teams, with clear goals and stronger accountabilities, should provide a strong platform for further progress in 2017.”

He added he would reveal further plans about the firm’s direction later this year.

Rolls-Royce is a luxury automobile driven by very influential Africans, politicians, businessmen and religious leaders, notably from Nigeria and South Africa.

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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