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Corruption probe adds to Rolls-Royce worries

A probe into suspected bribery in Brazil, China and Indonesia has now spread into Nigeria

Rolls-Royce's (RR.) efforts to regain shareholder trust were dealt another blow after news emerged that a Serious Fraud Office probe into allegations of suspected bribery of agents had spread to Nigeria. According to reports, the UK body is now examining whether the engineer bribed government officials to boost its former energy operations in the oil-rich African nation, adding another twist to a criminal investigation that now spans four continents.

IC TIP: Sell at 635p

Nervy investors reacted by sending the shares down 3 per cent to 635p, just two weeks after the group’s valuation was dented by an underwhelming trading update. Chief executive Warren East signalled that first-half results would struggle to break even, before adding that a strong finish should enable it to meet full-year guidance. But analysts questioned whether this target can be met, particularly as it's heavily reliant on the struggling aircraft engine after-market business excelling in the second half.

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