BAE may face prosecution on claims of fraud
Defence giant BAE Systems faces prosecution by the Serious Fraud Office on multi-million pound corruption allegations.
The SFO confirmed yesterday it is to pursue claims that the firm paid out millions of pounds in bribes to win contracts from a number of countries.
BAE employs around 350 staff at Filton, who work in the research and development of military equipment.
It has already escaped prosecution in one case concerning a massive arms deal with Saudi Arabia, which was dropped in 2007 on national security grounds following the intervention of the then-Prime Minister Tony Blair.
The latest investigation involves contracts BAE Systems won from countries including Tanzania, the Czech Republic, Romania and South Africa.
Criminal charges would be brought under the 2001 Prevention of Corruption Act.
The firm has denied the allegations.
The SFO had reportedly given BAE until yesterday to accept its offer of a plea bargain with a fine or face criminal prosecution.
Despite the SFO's decision to go ahead, the final decision on whether to proceed would be taken by Attorney General, Baroness Scotland.
BAE Systems is one of the UK's largest manufacturers, making Army kit and military hardware, with more than 100,000 employees worldwide.
In a statement, it said it sought to resolve the "historical" matters under investigation as soon as possible.
It said: "BAE Systems has at all times acted responsibly in its dealings with the SFO, taking into account the interests of its shareholders and employees and the legal advice it has received. If the director of the SFO obtains the consent that he seeks from the Attorney General and proceedings are commenced, the company will deal with any issues raised in those proceedings at the appropriate time and, if necessary, in court."
A spokesman for the Attorney General's office said: "As in all consent cases, when a file is received, the Attorney will assess whether there is sufficient evidence for a prosecution and whether it is in the public interest to do so.
"It is a constitutional principle that when taking a decision whether to consent to a prosecution, the Attorney General acts independently of Government."
Legal expert Christopher Grierson, a partner in the bribery and corruption task force at Lovells LLP international law firm, said: "The sheer scale of the penalties being sought, which are believed to be £1 billion, is unprecedented in the UK and will send shockwaves across corporate Britain.
"Whilst we have yet to see how this will play out, it is clear that the SFO is flexing its muscles and attempting to emulate the aggressive approach of the US authorities."
2 Comments
by MB, Bristol
Friday, October 02 2009, 12:00PM
“Spot on, John.
Why do we (UK) have to do everything by the book, mostly to our own detriment?
I work in a trading business which imports goods into the EU under certain tariff headings. We abide by these headings and pay correct tariff. Do the French? No, they just change description of goods to meet another tariff.
Likewise, if you want to do business with Arabs etc you know the score. If you don't come across, then look out, because you can bet the Russians, French etc will play ball.
We are penalising UK plc and risking UK jobs, with this pointless prosecution.
SFO, find a real crime.”
by John, Briz
Friday, October 02 2009, 9:54AM
“Who are the "victims" of this so called fraud???
Do people not realise how real business is done in the real world?
The foreign governments and officials who are accepting bribes or commissions are certainly being dodgy and are defrauding their populations of obtaining best value contracts, but BAE? BAE are just doing business. If they are faced with
dealing with corrupt foreign governments then they have to play the game the way it is played over there to win any business at all.
This looks very much like the UK state beating it self up, to its own loss and benefiting no-one but its competitors who will continue to do business the way it is really done and will win the future contracts that the UK will have denied itself from.”