Rolls-Royce Holding Plc said on Monday it will co-operate with Brazilian authorities should they chose to approach the company over the allegations of bribery in the country.
Rolls-Royce paid bribes through an agent in order to win a $100 million contract with Petrobras, according to a testimony from a former executive of the Brazilian company. The allegations were revealed by the federal court in Parana state.
Even though Rolls-Royce has not been reached by Brazilian authorities yet it said in an emailed statement that it willing to help with the investigation into Petrobras. The British engineering company, which supplies gas turbines to Petrobras, also said it does not know to which contract the allegations are referring to.
“We want to make it crystal clear that we will not tolerate improper business conduct of any sort and will take all necessary action to ensure compliance,” Rolls-Royce said.
Petrobras is involved in the largest corruption scandal win Brazil, including executives being accused of taking bribes from a number of construction companies and splitting the money with government officials.
The allegations are being investigated by Brazilian securities authorities, the U.S. Securities and Exchange Commission and outside lawyers.
The two companies have a working history of over five years and Brazil is one of Rolls-Royces bets for future growth. The company projected that revenue from the country will at least double by 2020.
The latest allegations put additional pressure on Rolls-Royce, which is already under investigation from Britain’s Serious Fraud Office over accusations of bribery and corruption in Asia. Authorities made the process formal in late 2013, after Rolls-Royce agreed to reveal details around its operations in China and Indonesia in 2012.
The US Department of Justice is also considering to initiate an investigation into Rolls-Royce over the same allegations. The company has been linked to corruption and bribery in India as well.
However, analysts and investors have pointed out that they are more concerned about the companys plan to return to profit rather than bribery investigations that could go on for years.
Rolls-Royces shares immediately fell on the news but rebounded just as fast and closed on Monday with decrease of 0.85% to GBX 936.50. On Tuesday the stock lost 0.85% to GBX 928.50 at 08:02 GMT, marking a one-year decrease of 5.36%. The company is valued at £17.62 billion.
According to the Financial Times, the 21 analysts offering 12-month price targets for Rolls-Royce have a median target of GBX 860.00, with a high estimate of GBX 1 310 and a low estimate of GBX 645.00. The median estimate represents a 8.17% decrease from the last closing price.
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