THAI launches probe into Rolls-Royce bribery charges

[webfact]

THAI launches probe into Rolls-Royce bribery charges
By THE NATION
AGENCIES

 

 

BANGKOK: -- THAI AIRWAYS International (THAI) yesterday decided to set up a committee to probe allegations of bribery in the purchase of engines from British engineering giant Rolls-Royce.

 

Flight lieutenant Kanok Thong-purk, a THAI executive vice president, said the result of the investigation would be known within 30 days. 

 

Thailand is among seven countries named by the United Kingdom’s Serious Fraud Office (SFO), which found conspiracy to corrupt or failure to prevent bribery by Rolls-Royce, involving payment of US$18.8 million (Bt663 million) to regional intermediaries. 

 

“Some of the money was for individuals who were ‘agents of the State of Thailand and employees of Thai Airways’,” the SFO said. These agents “were expected to act in Rolls-Royce’s favour with respect to a purchase by Thai Airways of T800 engines”, the BBC reported.

 

Full story: http://www.nationmultimedia.com/news/national/30304422

 

-- © Copyright The Nation 2017-01-19

 

 

 

RELATED: Rolls-Royce to pay more than $800 million to settle bribery charges - U.S.
 

[smutcakes]

Surely THAI and the relevant agencies must of been aware that this case had been ongoing, and should of presumably tied up any lose ends as to ensure there is no one of importance who could be directly fingered for this.

 

Perhaps thats why they will only need 30 days for there investigation Committee to resolve there was no wrong doing on anyones behalf.

 

Unless they can find someone conveniently positioned to blame it on.

 

As we found out previously if the intemediary pays back the bribe when caught then it is not a crime in Thailand.

[Brer Fox]

Usually with these big time alleged bribe claims there is usually a bagman appointed by the at arms-length recipients. This bagman receives the money directly, takes a commission and then re-routes it in devious ways to the beneficiaries. The bagman will probably be given the option of taking the rap himself or be fitted with a pair of cement shoes. The chances of the list of recipients coming to the surface is almost nil.

[ezzra]

So in the end the flying public is the loser here, the crocks got their bribes,

the engine company got their orders and profits, the UK government

government got their 671 million pound penalty, and who's the sucker/loser

here? the flying public that have to pay more for the tickets....

[rkidlad]

See, see! Corruption happens everywhere! Not just Thailand! Corruption in Thailand is okay because it happens everywhere! There are bad people in every country. 

 

Now watch while Thai airways and the Thai authorities treat this case as seriously as the British government and Rolls Royce have. I see huge fines and long prison sentences for all involved here.  Big names splashed all over the news for wrongdoing. 

 

Right, I'm off to take my meds. 

[Sphere]

Move on folks....nothing to see here.....

[colinneil]

They cannot be serious Thais probing corruption  

No major contract/scheme is carried out here without somebody receiving/ giving bribes.

[optad]

Speaks more to overpriced Thai Airways tickets over the same period and Airasia's ascendancy. 

[boooker]

By now those names already known in the Uk...all abd each...question is the blow up cover up

[Jonmarleesco]

These offences took place during a time when bribery was Thailand's modus operandi (and doubtless, little has changed). RR shouldn't have paid; the Thais shouldn't have 'asked'.

[Jonmarleesco]

4 hours ago, smutcakes said:

Surely THAI and the relevant agencies must of been aware that this case had been ongoing, and should of presumably tied up any lose ends as to ensure there is no one of importance who could be directly fingered for this.

 

Perhaps thats why they will only need 30 days for there investigation Committee to resolve there was no wrong doing on anyones behalf.

 

Unless they can find someone conveniently positioned to blame it on.

 

As we found out previously if the intemediary pays back the bribe when caught then it is not a crime in Thailand.

'Unless they can find someone conveniently positioned to blame it on.' A bit difficult to find some Burmese for this.

[smutcakes]

16 minutes ago, Jonmarleesco said:

'Unless they can find someone conveniently positioned to blame it on.' A bit difficult to find some Burmese for this.

 

Perhaps someone deceased, or preferably a Shinawatra.

[mtls2005]

Seems like the statute of limitations has long since run out?

 

Any "probe" will be to more evenly distribute the proceeds, to the "probers".

[Sphere]

Quote

The case involved admitted bribery in Thailand, but authorities said no Thai complaint was filed, and no details were forthcoming.

 

From the article in the other paper.....

[NanLaew]

3 hours ago, optad said:

Speaks more to overpriced Thai Airways tickets over the same period and Airasia's ascendancy. 

 

Here's a quote from the Financial Times

 

Quote

Rolls-Royce employees were also charged with failing to prevent the payment of $2.2m to AirAsia executives between 2011 and 2013 to win orders for Rolls-Royce products and services.

 

[Srikcir]

"the firm paid more than $36 million between 1991 and 2005 to agents to help it secure three separate contracts to supply Trent aero engines to Thai Airways."

Bribery crossing three different government regimes (PTP, Democrats and military Junta) related to a state-owned enterprise. Guess who won't take any blame?

[worgeordie]

Rolls Royce have been found guilty of paying bribes in other countries,

but i dont think anyone will be found guilty of accepting the bribes here,

just like the bomb scanner scam.

regards worgeordie

[optad]

10 minutes ago, NanLaew said:

 

Here's a quote from the Financial Times

 

 

Quote

Rolls-Royce employees were also charged with failing to prevent the payment of $2.2m to AirAsia executives between 2011 and 2013 to win orders for Rolls-Royce products and services.

 

There you go. You can be corrupt and still be more efficient than Thai airways.

 

Thanks for the research, Nan.

[Eric Loh]

You mean there are corruptions by others besides the Shin? I am shocked to the core. 

[sanukjim]

5 hours ago, ezzra said:

So in the end the flying public is the loser here, the crocks got their bribes,

the engine company got their orders and profits, the UK government

government got their 671 million pound penalty, and who's the sucker/loser

here? the flying public that have to pay more for the tickets....

 That is in Thailand that the locals will foot both the cost of the engines and the bribe.In The UK Rolls-Royce will be fined at least the cost of the bribe.So sell the stock now and buy it back in 6 months.

[thedemon]

1 hour ago, mtls2005 said:

Seems like the statute of limitations has long since run out?

 

Any "probe" will be to more evenly distribute the proceeds, to the "probers".

 

Yeah think you're right.

 

Pretty sure the statute of limitations in this case (bribery by a government official) is 10 years. The last contract (under this investigation) was concluded in 2006.

 

So only just run out - if the assumptions are correct.

 

In any case, from reading the UK SFO report, the proof is all in internal RR documents. Nothing in writing from TG (of course) and nothing in writing from the intermediaries. Therefore virtually impossible to prove a crime in Thailand. Just an agent earning their commission. Doubt they paid tax on that USD36M but that is a different matter.

[thedemon]

Here are the relevant parts from the SFO investigation, in case anyone is interested.

 

********

 

COUNTS 2, 3 & 4 – CIVIL THAILAND
  
  
COUNT 2
  
  
Conspiracy to corrupt between 1 June 1991 and 30 June 1992 Thai Airways Trent 800 engines (1st Order) In Summary
   
49. RR agreed to pay millions of dollars (c. US $18.8 million) to the Regional Intermediary and another intermediary (“Intermediary 3”). A proportion of these monies was intended for individuals who were agents of the State of Thailand and employees of Thai Airways. In particular, the agents of both principals were expected to act in RR's favour with respect to a purchase by Thai Airways of T800 engines.
    
    
*** Facts ***
  
     
50. In June 1991 Thai Airways (“Thai”) placed an order of six Boeing 777 (“B777”) aircraft which was later raised to eight. RR in turn sold Trent 800 (“T800”) engines to Thai for those aeroplanes. At the same time as the sale was made RR arranged for increasing sums of money to be provided to its intermediaries. It is inferred that a proportion of those monies was then passed on by the intermediaries to influence the purchasing decision.
  
51. The Regional Intermediary was told by RR that up to US $1 million per aircraft was “available for dispersal” in connection with the Thai order.
  
52. In July 1991 an RR internal memorandum recorded that a total figure of US $8 million was said by the Regional Intermediary to be “the extent of the ‘demands’”. RR arranged for this money, amounting to US $1.33 million per aircraft, to be paid to Intermediary 3.
  
53. The employee who drafted the memorandum commented that a single copy of the memorandum would be retained and recommended that other copies should be destroyed.
   
54. In relation to the contracts described in Counts 2 to 4, when monies were promised or paid to Intermediary 3 a Side Letter amended Intermediary 3’s agreement with RR.
  
55. This Side Letter described the sums of US $1.33 million per aircraft as a “Success Fee”. The document made no reference to any third parties who were to be paid.
  
56. In August 1991 a further memorandum recorded that “Additional requests from the territory”, which included an amount sought of “US$1M payable within seven working days of the execution of an irrevocable contract to purchase Trent engines.” A manuscript amendment to a document indicates that this was to be paid to Intermediary 3. An RR senior employee approved the commission arrangements.
 
57. By October 1991 there were discussions between RR and the Regional Intermediary as to when payments would be made.
 
58. Alongside the large fixed sums being paid to Intermediary 3, that intermediary also stood to receive a separate percentage commission. A payment structure for that portion of the commission was approved by an RR employee whereby Intermediary 3 received 50% of the commission as a first payment – rather than 25%, as was first anticipated – in order to “maintain local enthusiasm for further business”.
  
59. On 14 November 1991 RR won the contract to supply engines for the six aircraft. The commission payments were made during early December 1991 and into February 1992. 
  
60. By the end of February 1992 a total of US $4.75 million had been paid to Intermediary 3. Two of the sums making up that total figure (US $1.9 million and US $2.4 million) were authorised at the point of payment by an RR senior employee.
  
61. The Government of Thailand’s approval of the order was delayed as the number of aircraft sought by Thai rose from six to eight aircraft. Eventually, in March 1992, the expanded order for eight aircraft was approved by the Government.
   
62. In March 1992 an internal memo sent to two RR senior employees noted that US $4.75 million remained to be paid to Intermediary 3. Approval of the payment was sought from the senior employees. The memo commented that: "We are urged to release the money as soon as the Cabinet endorsement is given, as a prompt payment could have an influence on the thinking of [a senior officer of Thai]."
   
63. The next day a further memo was sent to the same two RR senior employees. It had been noted that the promise of payment to Intermediary 3 was per aircraft. It was necessary therefore to authorise the payment of a further US $2.66 million to reflect the expanded order by Thai.
   
64. The final two payments of US $4.75 million and US $2.66 million were made shortly after in March 1992.
 
65. During April 1992 RR authorised the payment of a further US $100,000 to Intermediary 3. This was done so that Intermediary 3 could pay “disappointed recipients” who had received some
payment but had expected more from Intermediary 3’s percentage commission.
   
66. The formal amendment of the contract between RR and Thai, raising the order for the number of aircraft and associated engines, was on 15 May 1992.
   
67. On 18 June 1992 a letter to Intermediary 3, also marked as hand delivered to the Regional Intermediary, documented the large “success fee” payments which had now been made.
   
68. However, between 22 June 1992 and 26 June 1992, complaints were received from the Regional Intermediary that his contacts felt “short changed” on the spare engines sold to Thai alongside the installed engines: “[The Regional Intermediary] is anxious as [a senior military officer in the Royal Thai Air Force] has threatened to resign and RR can ill afford to lose his support in Thailand."
 
69. The response by RR was to create a further Side Letter to Intermediary 3’s agreement which stated that: "[…] in view of the special efforts made on the sale of Rolls-Royce Trent engines to power eight {8) Boeing 777 aircraft and the associated spare engines to Thai lnternational, we are prepared to pay further commission
  
70. This Side Letter provided for immediate payment of US $1.33 million and a further US $1.33 million payment contingent on a second sale to Thai of engines for an additional seven B777 aircraft. The day after the Side Letter was agreed, an RR senior employee authorised and paid US $1.33 million to Intermediary 3.
  
  
COUNT 3
  
  
Conspiracy to Corrupt between 1 March 1992 and 31 March 1997: Thai Airways Trent 800 engines (2nd Order) In Summary
   
71. RR agreed to pay US $10.38 million to their intermediaries. A proportion of these monies was intended for individuals who were employees of Thai. In particular, those individuals were expected to act in RR's favour with respect to a second purchase by Thai of T800 engines.
 
  
*** Facts ***
  
  
72. Thai made a second purchase of six B777 aircraft. RR wanted to ensure that its T800 engines were selected by Thai. RR again paid Intermediary 3 and the Regional Intermediary and it is inferred that they passed on a proportion of these monies so as to influence the purchasing decision.
    
73. In March 1992, when a second order by Thai was first anticipated by RR, an RR employee agreed with Intermediary 3 a “success fee” of 135 million Thai Baht (then approximately US
$5.29 million), should Thai order further B777s with T800 engines. This was formalised via a Side Letter to Intermediary 3’s agreement.
  
74. The order did not proceed at that time. Two years later, on 20 May 1994, RR paid US $500,000 to Intermediary 3, despite the deal not yet being concluded. In April 1995, with the order still
not finalised, a further Side Letter was sent by RR to Intermediary 3. This increased the 1992 offer to a payment of US $1 million per aircraft (six aircraft were envisaged). There were also changes proposed to Intermediary 3’s percentage commission.
   
75. The Side Letter specified that the US $500,000 payment was an advance on Intermediary 3’s percentage commission. Intermediary 3 wrote to RR later in April 1995 to explain that this was incorrect: "the expense of RR only for lobbying [a senior officer of Thai]. It is not an advance money at all."
   
76. In July 1995 a further Side Letter was drawn up confirming that the US $500,000 payment would be treated as ex gratia and would not be deducted from Intermediary 3’s commission. 
   
77. Intermediary 3 also complained about the level of commission. An internal memo noted that the payment terms for Intermediary 3’s percentage commission “would not meet his commitments” and the Regional Intermediary needed to manage his “nominees” better.
  
78. A letter was sent by an RR employee to Intermediary 3 which stressed that: "It is also important that we know where such funds are being placed, albeit that such information is best handled verbally."
   
79. A letter was also sent to the Regional Intermediary commenting that if Intermediary 3 had committed beyond his 1% commission then: "[…] all I can offer to do is to review the level again but I have to know how he intends to allocate these monies such that I have some evidence on which I can make a case for such review."
  
80. RR subsequently raised Intermediary 3’s percentage commission from 1% to 2%.
  
81. On 30 October 1995 an internal memo asked whether the fixed sums of US $1 million per aircraft should be made payable within seven days of the order by Thai rather than within 30 days, as agreed. The memo commented: "[the senior officer of Thai] is waiting to issue the ‘Order’ to Boeing but before doing so wants evidence from Rolls-Royce that he is going to, through [Intermediary 3], receive funds within 7 days."

82. On 6 November 1995 a Side Letter was issued agreeing payment to Intermediary 3 within seven days of the order’s confirmation.
   
83. Internal correspondence from 8 February 1996 records the agreement to make payment of US $1 million in advance, despite the order not yet being confirmed. Payment was authorised
that day.
   
84. Following payment of the US $1 million advance, the Board of Thai approved the T800 engine for six B777 aircraft. At this stage Government of Thailand approval was still yet to be secured.
   
85. In April 1996 an RR senior employee and two RR employees were made aware of the need to pay the additional US $1.33 million promised to Intermediary 3 in June 1992 at the conclusion of the first order of engines.
  
86. This sum was later reduced to US $1.14 million as the number of aircraft and engines being purchased by Thai had itself reduced.
  
87. An internal memo in May 1996 referred to the US $1.14 million payment being made to an employee of Thai: "[…] who has allocated it to the political helpers he has used. I can understand why it is euphemistically referred to as the Power(plant) Group."
   
88. In November 1996 an internal RR memo noted that the same employee of Thai had asked an RR senior employee to “release” US $1 million of the US $5 million which remained to be paid to Intermediary 3. The memo recommended that payment be made now: "so that Thai can use it to 'manage the political process.' "
  
89. Three RR senior employees agreed to this. The second advance of US $1 million was againpaid to Intermediary 3.
  
90. In January 1997 an internal memo sent to two RR senior employees noted that the order by Thai awaited ratification by the Government of Thailand and that: “Part of the concession package associated with this contract involves the payment of US$7.14M contingent upon Government approval of the purchase. These funds would be passed through our Commercial Adviser who would take responsibility for the ‘in-country' distribution.”
  
91. The purpose of the memo was to advise of press reports which had suggested that the Thai Government might prefer leased aircraft to a purchase and that RR were therefore exposed to a risk of having paid out US $2 million without having secured the order, albeit repayment of those monies had been guaranteed by the two intermediaries.
   
92. In February 1997 a meeting of RR’s CRSC was held at which were present three RR senior employees who had been involved in agreeing the second advance of US $1 million. The CRSC approved a report which asserted that no payments to agents across RR’s business divisions during the previous 12 months were “non-compliant with (relevant) laws and regulations”. Included as a significant part of that report were the first and second orders of T800 engines by Thai, and details of the sums paid to Intermediary 3 and the Regional Intermediary. The report was sent on to RR's external auditors.
  
93. Finally, in March 1997, an internal memo to two RR senior employees confirmed that the Government of Thailand had approved the second order placed by Thai. This would release
payments from RR of US $5.14 million to Intermediary 3. There were also smaller payments to Intermediary 3 and the Regional Intermediary described as their percentage based commissions. These payments were collectively referred to as “marketing expenses”.
   
94. The figure of US $5.14 million paid at this stage to Intermediary 3 reflected the initial offer of US $1 million per aircraft, for six aircraft, or US $6 million. Subtracted from this were the two advances of US $1 million. The balance of US $4 million was then supplemented by the ‘rediscovered’ payment of US $1.33 million which had been reduced to US $1.14 million. The
payments were subsequently made.
   
95. Payments of percentage commissions continued to be made to both Intermediary 3 and the Regional Intermediary, with the timing of those payments linked to aircraft deliveries. Intermediary 3 and the Regional Intermediary were paid around US $1.37 million each.
  
  
COUNT 4
  
  
Conspiracy to Corrupt between 1 April 2004 and 28 February 2005: Thai Airways Trent 800 engines (3rd Order) In Summary
  
96. RR agreed to pay almost US $7.2 million to its intermediaries. A proportion of these monies was intended for individuals who were agents of the State of Thailand or employees of Thai and those individuals were expected to act in RR's favour with respect to a third purchase by Thai of T800 engines.
  
  
*** Facts ***
  
  
97. A third order of B777 aircraft by Thai had been under discussion as early as 1996. The order did not materialise until late 2004. RR again ensured that significant sums of money were
available to Intermediary 3 and the Regional Intermediary. It is inferred that, to persuade Thai to purchase further aircraft with T800 engines, a proportion of these monies was passed on, in this instance to contacts connected to the Government of Thailand.
  
98. An internal RR email from April 2004 notes that the Regional Intermediary had rejected commission terms proposed by RR on the B777 order and had indicated that he would talk to an RR senior employee.
   
99. The Regional Intermediary was requesting an additional 4% commission, or approximately US $500,000 per aircraft. This would raise overall commissions on this contract to 8%, breaching a recently imposed internal limit as to the levels of intermediary commission.
    
100. A briefing note addressed to an RR senior employee noted that: "Additional commissions on previous Thai Airways business were paid, and these were approximately twice what we are now being asked to pay. However, more recent Corporate Governance guidelines prevent this, and the commercial deal has less margin with which to fund such payments."
   
101. In May 2004 the Regional Intermediary was written to with a proposal for a new commission structure. The proposal provided for less commission than the Regional Intermediary had sought and made a proportion of the commission conditional on RR securing a Total Care Agreement (“TCA”) with Thai. TCA was RR's maintenance product providing for engine repair costs to be spread across a long-term service contract based on the number of hours flown. Selling such agreements was a priority for RR.
  
102. The same letter noted that the Regional Intermediary might wish for some commitments to be made with Intermediary 3.
   
103. In June 2004 after a meeting with the Regional Intermediary an internal RR email noted that: "[The Regional Intermediary] stated RR has an impasse with Thai on add'I 6 x 777s - he informed [an RR senior employee] today that airline will not accept engine concessions linked to TCA, and [Regional Intermediary Company B][Intermediary 3 Company A] engine commissions cannot be linked to TCA, but [the RR senior employee] informed him that RR cannot change its present position."
   
104. Around this time a briefing note to the RR senior employee referred to in paragraph 100 commented that commissions for the Regional Intermediary and Intermediary 3 had not been approved as: “[The Regional Intermediary] advised Airlines that there was a significant risk the PW/A330's would be selected over the RR/777's if total commissions on Engines were less than 8% of net Engine revenue (excluding TCA). Airlines did not accept this position and
[the Regional Intermediary] rejected the Airlines final offer […] The latest information indicates that the airline will choose either RR/777s or RR/A340s”.
   
105. In mid-July 2004 the Regional Intermediary was written to following a meeting with him. It was recorded that RR’s offer on commissions was final.

106. On 28 July 2004 Thai’s Board decided to purchase the six B777s and two further Airbus A340 (“A340”) aircraft. They selected RR engines for the B777s, while the A340 was a ‘sole-source’
aircraft which only took RR’s Trent 500 (“T500”) engines.
  
107. However, a letter from August 2004 records that discussion as to commission levels between the Regional Intermediary, employees of RR and a RR senior employee were ongoing.
108. At the end of September 2004 the Board of Thai confirmed further details of its order: five spare engines for its A340/T500 fleet, and two spare engines for the B777/T800 fleet.
  
109. On 13 October 2004 a memo to the same RR senior employee proposed paying 4% to Intermediary 3 and 2% to the Regional Intermediary in respect of T800 engine sales.
  
110. On 15 October 2004 a further memo was sent to the senior employee and dealt with concerns raised by the senior employee as to the Regional Intermediary's expectations. The memo
clarified that the proposal represented 6% in total on T800 engine sales for the two intermediaries to share, as well as additional commissions were a TCA to be secured. The senior employee asked that a different RR senior employee communicate with the Regional Intermediary.
  
111. A Side Letter of 22 October 2004 agreed to make payments to Intermediary 3 of 2% commission on seven spare T500 engines. These commissions were, at this point in time, described as payable in two parts.
   
112. The agreement covered seven spare engines, however there was no contemporaneous sale of seven such engines. There had been, a year earlier, a sale of two spare engines of the T500 model. There was then a decision by Thai to purchase five further spare engines, which decision had already been taken a month prior to this agreement to pay commission. The commission was nonetheless expressed as relating to seven spare engines.
  
113. Intermediary 3’s commissions for the T800 engines were initially to be spread over 7 to 10 months, with payment made in three stages. Two of those stages were around one to two
months after the expected date of Government of Thailand approval of the engine order, with the balance to follow around six months later.
   
114. Following a meeting on or before 11 November 2004 the Regional Intermediary was described as being frustrated at the time taken to approve the commission arrangements. He
commented that he had had to use his friendship with an RR senior employee to ensure the arrangements were approved.
   
115. Both the Regional Intermediary and Intermediary 3 requested that the T800 and T500 spare engines commission be paid “up front”. To do so required internal approval from an RR senior
employee.
   
116. A letter was subsequently issued to Intermediary 3 with a proposal to pay three quarters of his commission on 7 January 2005, contingent on Government approval, and the remaining
quarter on the delivery of the aircraft. A similar letter made the whole of the 2% T500 spare engine commission also payable by the same date.
   
117. An internal RR email dated 19 November 2004 recorded that a meeting had taken place between Intermediary 3 and the Regional Intermediary and a member of the Thai Government. It was reported that there had been a: “Very good meeting, very positive feedback on new A340 and 777 business, on track for Cabinet 23rd Nov”.
   
118. The email went on to discuss commission payments. Intermediary 3 and the Regional Intermediary had rejected RR’s proposed phasing of payments and insisted that they needed
all of Intermediary 3’s: "4% on Government approval, i.e. Dec 04".
   
119. The Regional Intermediary was recorded as having threatened to raise this issue of the timing of payments with the RR senior employee. Later that day an internal RR email records: "Do we think all of the 4% [Intermediary 3 Company A] flows through to....? I assume not all of it does."
   
120. On 22 November 2004 a further letter was sent to Intermediary 3 offering to pay all but 12.5% of the commission on 7 January 2005, assuming Government of Thailand approval had been given.
   
121. The next day, when the Cabinet of the Government of Thailand was scheduled to meet, a final letter was sent to Intermediary 3, stating that the full T800 commission would be paid on 7 January 2005, again assuming Government approval had been given.
   
122. On 4 December 2004 an internal RR email stated that the order by Thai was approved: "Calls between [certain Thai Government ministers and a Thai Airways employee] yada, all positive. Airline still not heard the good word yet and not clear if POs signed. [Intermediary 3 and the Regional Intermediary] have commitment from [the Thai Government deputy minister whom they had met] that it will be sorted by tomorrow."
   
123. However, Intermediary 3 was seeking payment of half of the T800 commission by 17 December 2004. The 4 December 2004 email concluded:
"WARNING:-[the Regional Intermediary and Intermediary 3] have dinner with [the Thai Government deputy minister whom they had met] on 18th Dec and hence [the Regional Intermediary] may suddenly decide to support [Intermediary 3]'s request." […] "we should be firm in my view. Comments?"
  
124. Two RR employees replied, agreeing that there should be no further movement by RR.
  
125. On 20 December 2004, an updated CAA was signed by Intermediary 3. Intermediary 3 sent back pro-forma invoices for the payments RR were due to make.
   
126. On 4 January 2005 RR made payment of US $3,797,718 to Intermediary 3, authorised by an RR senior employee. The payment was described as being for the contract signature for T800 engines to be installed into six B777 aircraft, and two spare T800 engines. On the same date RR also paid US $1,497,339 described internally as an “Additional 2% for sale of seven (sic)
spare T500s to Thai”.
   
127. A corresponding payment of US $474,715, described as relating to the sale of installed and spare T800 engines, was made to the Regional Intermediary one month later, with subsequent payments bringing the total to US $1,898,860. Between Intermediary 3 and the Regional Intermediary a total of US $7,193,917 was paid in connection with the T800 engines
and T500 spare engines order.
 
128. The formal contract for the five T500 spare engines was concluded on 17 January 2005 with Thai. The T800 engine contract was concluded the following year on 15 June 2006. 
 

[thedemon]

20 minutes ago, thedemon said:

 

Yeah think you're right.

 

Pretty sure the statute of limitations in this case (bribery by a government official) is 10 years. The last contract (under this investigation) was concluded in 2006.

 

So only just run out - if the assumptions are correct.

 

In any case, from reading the UK SFO report, the proof is all in internal RR documents. Nothing in writing from TG (of course) and nothing in writing from the intermediaries. Therefore virtually impossible to prove a crime in Thailand. Just an agent earning their commission. Doubt they paid tax on that USD36M but that is a different matter.

 

Did a bit of checking and seems I'm wrong.  The statute of limitations isn't quite that simple.

 

The bribing "of" a government official carries a maximum penalty of 5 years imprisonment and therefore the SOL is 10 years.

 

However bribery "by" a government official carries a maximum penalty of life imprisonment or death and therefore the SOL is 20 years.

 

In any case that's academic. I think everyone knows that no one involved in this case will be prosecuted for anything in Thailand.

[bangkokfrog]

This will go the same way as the case against the lady who was head of the TAT. The FBI found that she and a US company were involved in bribery in relation to the Bangkok Film Festival. Evidence sufficient to send those at the US end to jail, but so far little appears to have been done in Thailand. People at this level have so much dirt on those around them that no one can afford to see them charged. A convenient disappearance or "suicide" in custody maybe, but I don't think we will see any of them in a courtroom.  .

[elgordo38]

Not a day goes by without some big name corporation name popping up and paying a fine for corruption. Greed thy name is profit. One wonders if they are cutting corners in the production of these engines in the name of profit. Investors are pouring money into these companies thinking they will be their retirement nest egg only to see it go up in flames. Is someone held accountable jail term no. These big corporations mirror Thai drivers do reckless things till the law catches you and pay a small fine. 

[NanLaew]

3 hours ago, optad said:

 

There you go. You can be corrupt and still be more efficient than Thai airways.

 

Thanks for the research, Nan.

 

My pleasure entirely but I suggest you google 'low-cost carrier business model'

[catinthehat]

1 hour ago, thedemon said:

  
 

68. However, between 22 June 1992 and 26 June 1992, complaints were received from the Regional Intermediary that his contacts felt “short changed” on the spare engines sold to Thai alongside the installed engines: “[The Regional Intermediary] is anxious as [a senior military officer in the Royal Thai Air Force] has threatened to resign and RR can ill afford to lose his support in Thailand."

And yet Prayut has always stated that there is no corruption within the ranks of the military. If I do not get my way, I will take my ball and go home. Like spoiled children.
 

   
75. The Side Letter specified that the US $500,000 payment was an advance on Intermediary 3’s percentage commission. Intermediary 3 wrote to RR later in April 1995 to explain that this was incorrect: "the expense of RR only for lobbying [a senior officer of Thai]. It is not an advance money at all."

These Greedy scum will always want more. Because they know that they are dealing with naive and gullable foreigners.
   
76. In July 1995 a further Side Letter was drawn up confirming that the US $500,000 payment would be treated as ex gratia and would not be deducted from Intermediary 3’s commission. 

And they gave in.
   
77. Intermediary 3 also complained about the level of commission. An internal memo noted that the payment terms for Intermediary 3’s percentage commission “would not meet his commitments” and the Regional Intermediary needed to manage his “nominees” better.
  
78. A letter was sent by an RR employee to Intermediary 3 which stressed that: "It is also important that we know where such funds are being placed, albeit that such information is best handled verbally."
   
79. A letter was also sent to the Regional Intermediary commenting that if Intermediary 3 had committed beyond his 1% commission then: "[…] all I can offer to do is to review the level again but I have to know how he intends to allocate these monies such that I have some evidence on which I can make a case for such review."
  
80. RR subsequently raised Intermediary 3’s percentage commission from 1% to 2%.
  
81. On 30 October 1995 an internal memo asked whether the fixed sums of US $1 million per aircraft should be made payable within seven days of the order by Thai rather than within 30 days, as agreed. The memo commented: "[the senior officer of Thai] is waiting to issue the ‘Order’ to Boeing but before doing so wants evidence from Rolls-Royce that he is going to, through [Intermediary 3], receive funds within 7 days."

82. On 6 November 1995 a Side Letter was issued agreeing payment to Intermediary 3 within seven days of the order’s confirmation.

Now the fixers need their money faster.
   
83. Internal correspondence from 8 February 1996 records the agreement to make payment of US $1 million in advance, despite the order not yet being confirmed. Payment was authorised
that day.

Stupid foreigners
   
84. Following payment of the US $1 million advance, the Board of Thai approved the T800 engine for six B777 aircraft. At this stage Government of Thailand approval was still yet to be secured.

Still being stupid
  

It's obscene how these scum were able to raise their "fee" from 1 to as much as 8%. Because as more fixers became involved more mouths to feed at the trough.

 

Just one case out  of thousands. Greed and corruption is like a drug. Once they get the feel for it and like it they want more and more. Faster and faster. It's no wonder there are so many VP's at TG. And moast of not all of the BOD are military officers. I say privatize it immediately. But it appears to be a cash cow. for those involved

 

Would be interesting to know (part of it came out in the recent Panama Papers) just how much black money is held offshore by Hi'So and government employees. Much of the above was on the watch of Mr T. Hmmmmm

 

I wonder what will happen to all of the "senior RR officials?  And the losers in the end. the flying public and the shareholders.
 

 

[Sydebolle]

They are not serious about this. RR can name those people by name, their bank accounts and all other details. 

If Thailand would be really after trying at least to move into the right direction as far as corruption is concerned, then they would assign the Ministry of Finance (co-incidentially a major shareholder in Thai Airways) and a neutral private company like Deloitte Australia or so.

Latter might though not take the job after their Michael Wansley got murdered in cold blood in Nakhon Sawan back in 1989 when trying to get answers from Kaset Thai Sugar Co on "accounting irregularities". 

So it might be fair to say that within reasonable time Thai Airways will confirm that despite deep digging nothing unusual or any suspects could be identified and hence would close the file.

Next please! 

[thedemon]

48 minutes ago, Sydebolle said:

They are not serious about this. RR can name those people by name, their bank accounts and all other details. 

If Thailand would be really after trying at least to move into the right direction as far as corruption is concerned, then they would assign the Ministry of Finance (co-incidentially a major shareholder in Thai Airways) and a neutral private company like Deloitte Australia or so.

Latter might though not take the job after their Michael Wansley got murdered in cold blood in Nakhon Sawan back in 1989 when trying to get answers from Kaset Thai Sugar Co on "accounting irregularities". 

So it might be fair to say that within reasonable time Thai Airways will confirm that despite deep digging nothing unusual or any suspects could be identified and hence would close the file.

Next please! 

 

I think you are right that there will be no serious investigation. And presumably RR knows the name(s) of the facilitators that they transferred commissions to.

 

However an agent earning a commission isn't illegal. You have to prove that the commission was shared with the decision makers at TG in order to prosecute anyone.. 15-25 years later that probably isn't possible, even if they wanted to. 

[NanLaew]

7 hours ago, thedemon said:

 

I think you are right that there will be no serious investigation. And presumably RR knows the name(s) of the facilitators that they transferred commissions to.

 

However an agent earning a commission isn't illegal. You have to prove that the commission was shared with the decision makers at TG in order to prosecute anyone.. 15-25 years later that probably isn't possible, even if they wanted to. 

Agreed. The revolving door at the THAI boardroom is probably powered by a Rolls Royce fan jet!

 

The current piggies at the THAI trough must be rather disappointed though.