For the first count, there was an alleged conspiracy to corrupt from June 1991 to June 1992, with RR agreeing to pay US$18.8 million (Bt666 million) to regional and other agents representing the Thai government and THAI so as to favour RR engines.
According to the statement, THAI purchased six Boeing 777s and RR sold Trent 800 engines to THAI for these aircraft, with $1 million available for each aircraft equipped with the RR engines for the purpose of influencing the buy decision.
Eventually, RR paid $8 million or $1.33 million for each of the aircraft’s engines.
To conceal the illegal act, it was suggested that only one copy of the memo on this matter should be kept, while the rest were to be destroyed, as the payment was described as a “success fee”.
In addition to this fixed amount, agents were also paid a separate commission percentage, with the first 50 per cent portion paid to agents to show enthusiasm for the deal.
According to the statement, RR won the first contract to provide its engines to the six planes in November 1991 and commission payments were made from December 1991 to February 1992.
By the end of Feb 1992, it said $4.75 million was paid to agents for the engine deal, which later expanded to 8 aircraft, resulting in an additional payment of $2.66 million.
The second count of alleged wrongdoing involving THAI’s purchase of RR engines happened between March 1992 and March 1997. In this second order of RR engines, the British firm agreed to pay $10.3 million to agents, a portion of which was intended for THAI employees as the national flag carrier purchased another six B777 and RR wanted to get the engine order for these aircraft.
In March 1992, it was agreed that the so-called “success fee” would be Bt135 million or about $5.29 million. However, the order did not go ahead and two years later, in 1994, RR paid another $500,000 to the agents despite the lack of success.
Later, there were talks on a fee to be paid to the agents, and it was raised from 1 per cent to 2 per cent.
‘Marketing expenses’
In October 1995 a senior THAI officer asked if the payment of $1 million per aircraft would be paid within 30 days if the airline made the second order for RR engines.
Later, the board of THAI approved a purchase order for six B777 aircraft and in April 1996 RR was told to pay the higher amount of $1.33 million, as promised earlier by the agents.
In January 1997, an internal memo shows $7.14 million would be paid upon the Thai government’s approval of the deal and the amount would be distributed domestically. But finally in March the same year, $5.14 million was paid by RR and was referred to as a “marketing expenses”.
The third count of alleged wrongdoing happened between April 2004 to February 2005 when THAI placed a third order for RR engines, with the engine-maker agreeing to pay $7.2 million to agents for distribution to individuals in the Thai government and THAI.
The airline’s order for new aircraft materialised in late 2004 and agents requested an extra commission fee of 4 per cent, so overall commission fees rose to 8 per cent. Citing competition from Pratt and Whitney, another engine-maker, RR was asked to give an 8 per cent fee to win the deal.
In July 2004, THAI’s board approved the purchase of another six B777 and two Airbus 340 using RR engines.
In October 2004, there was an agreement for an additional seven spare engines. And in January 2005, RR paid $3.7 million to agents for engines to be used on six B77 aircraft and another two spare engines. In addition, RR also paid an additional 2 per cent commission fee on the sales of all seven spare engines.
Altogether, $7.1 million was paid to agents for the sale of T800 and T500 engines provided by RR.
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