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Rolls-Royce says U.S. lawsuit 'without merit'

LONDON (Reuters) - British aero engine maker Rolls-Royce Holdings Plc said it was confident a lawsuit brought against it by two former employees would be found to be without merit.

Two ex Rolls-Royce employees in the United States are challenging a court order that prevents them from releasing information they say reveals potentially serious defects in its manufacturing processes, according to a report in the Financial Times.

The report said the two former quality-control officers at Rolls-Royce Corp, part of Rolls' U.S. unit, allege the company hid internal records of defects in engines it sold to commercial and military clients.

"This lawsuit is entirely without merit," a Rolls-Royce spokesman said, adding that a U.S. district Judge William T. Lawrence had already thrown out two of the four claims before the "discovery" phase of the litigation had been entered.

"Judge Lawrence did not find that Rolls-Royce engaged in any wrongdoing, failed to follow its quality system, concealed anything from the U.S. government or even that a jury is entitled to hear the allegations," the Rolls spokesman added.

"Rolls-Royce categorically rejects the other claims and will defend itself vigorously. Any and all facts of the case will be presented in court, where we are confident it will be found the lawsuit is without merit."

Last month an Australian safety regulator reported that Rolls had failed to identify a defect that caused one of its engines to explode on a Qantas Airways Ltd flight over Indonesia three years ago.

In its final report on the incident, the Australian Safety Transport Bureau (ASTB) said the company missed multiple opportunities to detect a faulty component.

Rolls is also engaged in a review of compliance procedures after Britain's Serious Fraud Office (SFO) launched an investigation into claims that company representatives paid bribes to win airline engine contracts in Asia.

Late last year Rolls said it could face prosecution after the SFO ordered it to conduct an internal inquiry into possible bribery and corruption by intermediaries in China, Indonesia and other overseas markets.

(Reporting by Rhys Jones; Editing by David Holmes)

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