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Rolls-Royce dragged into Brazil's corruption scandal, accused of giving kickbacks to authorities investigating Petrobras

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September 2
9:17 PM 2015

British engineering crown jewel Rolls-Royce is dragged into the giant Brazilian scandal, as it has been accused of giving kickbacks to officials involved in the state-owned oil giant Petrobras.

Rolls Royce supplies turbines for Pertobras' oil drilling platforms for more than ten years. It has a five-year energy service contract with Petrobras in 2013 worth a whopping $138 billion.

The British company is now being questioned for its ties with businessmen who are involved in the corruption. This scandal has lead to more than 100 indictments for senior corporate and political people. After it was dragged in the scandal, Rolls-Royce's shares dropped in February. According to a spokesman they are co-operating with Brazilian authorities. "We have repeatedly made it clear that Rolls-Royce will not tolerate business misconduct of any kind," said the spokesman.

Besides Petrobras, Rolls-Royce has been expanding in Brazil making deals with aeronautical firm Embraer, airline TAM, and another airline firm Avianca. This expansion is part of the BRIC (Brazil, Russia, Indonesia, and China) countries. The British company is also planning to penetrate Brazil's energy and marine sector. But it seems like the allegations of corruption is an unwelcoming gesture from the country. Besides Brazil, Rolls-Royce is also currently facing corruption charges in Asia. It is under investigation by the UK Serious Fraud Office for alleged bribery in China and Indonesia.

The Brazilian court released substantial documents February that has 600 pages of testimony from former Petrobras executive Pedro Barusco who claimed that Rolls-Royce paid him $200,000 to win a $100 million contract.

There are 80 other people charged with money laundering and bribery in the criminal investigation on Petrobras. This investigation is called "Operation Car Wash." Even President Dilma Rousseff is involved in the scandal. Petrobras accounts for 10 percent of the country's GDP. The scandal has already cost Brazil $2 billion.

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