Currency movements have proved far more punishing to engineering giant Rolls-Royce than the penalties imposed on it for the widespread bribery and corruption it engaged in around the world for more than two decades.
Of the record £4.6 billion loss reported by the group on Tuesday – one of the biggest in British corporate history – a mere £671 million is accounted for by last month’s settlement with authorities in Britain, the United States and Brazil.
The alarming (but perfectly legal) slump in sterling in the wake of the Brexit vote, on the other hand, resulted in a hit of more than £4 billion for the group, as it was forced to revalue its extensive $38 billion currency hedging operations.
Stripping out the cost of corruption and the “non-cash” hedging hit, Rolls-Royce was judged to have performed rather well over the past year. Underlying profits tumbled by 49 per cent to £813 million but this was better than the City had expected.
There was good news for shareholders too as the group decided to maintain the final dividend payment at last year’s level of 7.1p a share. The previous year was the first time in almost quarter of a century that Rolls-Royce had cut its payout to shareholders.
Unveiling the record loss, chief executive Warren East – who was not employed at the group during the years of bribery and corruption – was understandably keen to look forward, rather than back.
It was time, he said, to “draw a line in the sand” over the scandal and concentrate instead on the transformation of the business.
That’s all very well but it’s barely a month since the City and shareholders learned the full extent of the wrongdoing at Rolls-Royce, once the pride of British manufacturing.
The lengthy list of offences took place in seven different countries, from China to Indonesia and Thailand, over a period of 24 years, from 1989 to 2013.
In the High Court last month judge Sir Brian Leveson described the corruption at the group as "truly vast, endemic". The proceedings, he said, revealed "the most serious breaches of criminal law in the areas of bribery and corruption (some of which implicated senior management and, on the face of it, controlling minds of the company)."
Rolls-Royce was allowed to avoid prosecution because the settlement it reached with the investigating authorities was a Deferred Prosecution Agreement (DPA). Under a DPA, a company admits guilt and agrees to pay a penalty and to be monitored in the future in return for escaping prosecution.
But there’s no such protection for individuals, so while East and his new management team may be looking towards the future, investigators are continuing to wade through the group’s murky past.
Former chief executive Sir John Rose, one of Britain's most prominent business leaders, presided over Rolls-Royce for a decade and a half, from 1996 to 2011. Along with dozens of other former executives, Rose has been interviewed under caution by the Serious Fraud Office.
No charges have been brought and Sir John, who has engaged the legal firm WilmerHale to represent him, denies any wrongdoing.
Co-op Bank for sale
What do most people think of when the subject of the Co-op Bank is raised? The board of the cash-strapped lender likes to think it’s the bank’s ethical credentials, and its proud history as part of the mutual Co-operative movement.
Unfortunately, the image more likely to spring into most people's minds is that of Paul Flowers, the former Methodist minister who used to chair the bank.
Dubbed the “Crystal Methodist,” Flowers resigned after the business was brought to the brink of collapse by appalling mismanagement. He was later convicted of possessing cocaine and crystal meth after a sex and drugs tabloid sting.
Now the board has hoisted the “for sale” sign over the bank, four years after a £1.5 billion black hole in its accounts forced it into accepting a bailout by US hedge funds.
The board may believe the bank is an attractive proposition, particularly for challenger banks looking to beef up their operations. Its ethical stance could also be a draw, despite the best efforts of former chairman Flowers to tarnish its reputation.
It still has four million customers, including 1.4 million current account holders, who have stayed loyal despite the bank’s well-publicised problems.
However, given the additional capital the loss-making bank urgently requires, it may find suitors hard to find. The chances of the Co-op Bank brand surviving on the High Street are looking pretty slim.
Fiona Walsh is business editor of theguardian.com