One of Britain’s biggest corporate names has been dragged into a multibillion-dollar corruption scandal after Rolls-Royce admitted it was cooperating with Brazilian authorities investigating bribery in the country’s state oil business.
The engineering group, which said earlier this year that it had not been approached by the Brazilian authorities, confirmed that it was now cooperating with investigators after being asked about its relationship with a businessman facing various investigations connected to the scandal.
Scrutiny from the Brazilian investigators comes as Rolls-Royce remains under criminal investigation in the UK over bribery allegations in Asia. It also faces investor calls to be broken up following a series of profit warnings.
A Rolls-Royce spokeswoman said: “We are cooperating with investigating authorities in Brazil but are unable to comment further on a continuing investigation.”
The company was first linked to the scandal in Brazil in February, when allegations emerged during testimony from a former Petrobras executive turned prosecution witness that it had bribed politicians and staff at the state-owned firm.
Rolls-Royce now faces questions over its relationship with an influential Brazilian businessman who allegedly paid bribes to oil executives and government officials on behalf of Petrobras contractors, such as the Dutch engineering firm SBM Offshore.
Documents seen by the Guardian show that in April 2012, the businessman claimed his company represented Rolls-Royce in Brazil. Months later, the company won a £100m contract to supply power turbines for Petrobras oil platforms. He also claimed Rolls-Royce conducted due diligence on his company.
Investigations into Julio Faerman intensified this month when a Brazilian judge approved a high-profile plea bargain requiring him to cooperate with prosecutors in exchange for leniency.
The Rolls-Royce spokeswoman declined to answer the Guardian’s questions about the company’s relationship with Faerman, but said in a statement: “We have repeatedly made it clear that Rolls-Royce will not tolerate business misconduct of any kind.”
Prosecutors in the Netherlands discovered last year that Faerman had made payments via offshore companies to government officials in Brazil. Faerman claimed to have extensive contacts across Petrobras, from senior executives to engineers, and access to confidential information about the company.
An influential parliamentary inquiry in Brasilia is also investigating Faerman as part of its own inquiry into the scandal.
The Swiss attorney general’s office is also looking into the businessman over the alleged use of Swiss bank accounts, according to the newspaper O Estado de São Paulo. The Swiss authorities said in March that they had frozen more than $400m (£260m) of assets in Swiss bank accounts connected to the scandal and allegedly used to process bribes.
Faerman, who is understood to be living in London, did not respond to requests for a comment or an interview. A representative at his company’s office in Rio de Janeiro said he was unavailable to speak to the Guardian.
Rolls-Royce has been under investigation in the UK since December 2013 after the Serious Fraud Office (SFO) began looking into bribery allegations in Indonesia and China. The SFO’s director said last year that the investigation concerned several divisions of Rolls-Royce business activity.
In Brazil, deepening investigations into the Petrobras scandal, known locally as Petrolão, have implicated senior politicians and business executives. The country’s oil and gas industry has been engulfed by the affair, which weighs heavily on the country’s economy.
The speaker of Brazil’s lower house of congress, Eduardo Cunha, was charged earlier this month over allegations he accepted $5m in bribes to help secure Petrobras contracts.
Over the past year, investigations into the sprawling scandal have spread beyond Brazil’s borders. Petrobras was subpoenaed by the US Securities and Exchange Commission (SEC) late last year, and Reuters has reported that the US Department of Justice has launched its own investigation into the company.