BAE faces second fraud investigation

BOSSES at defence giant BAE Systems today pledged to clear its name of fraud allegations.

Reports in national newspapers claim the Serious Fraud Office (SFO) is continuing investigations of alleged bribery during arms and equipment sales.

It comes just a few years after the reputation of the company was damaged by bribe allegations after a similar probe.

The SFO was investigating allegations BAE ran a 60m "slush fund" offering sweeteners to Saudi officials in return for lucrative contracts as part of the Al-Yamamah arms deal in the 1980s.

It dropped the charge, claiming it would affect national security. But the SFO is conducting a corruption probe into the sale of aircraft and other equipment to South Africa the Czech Republic and Tanzania.

It is believed deals could involve Hawk jets which are test flown at the BAE Systems site at Warton.

Fylde MP Michael Jack said fresh reports of allegations of corruption will do the defence giant no favours as its attempts to make headway into export markets.

He added: "Although these reports say little of what the corruption is about, they do not do the reputation of BAE Systems any good.

"They have just managed to shake off the damage of the Al-Yamamah fraud probe and now there is a possibility of a fresh probe."

One reported possibility is that BAE could be penalised for its accounting procedures, specifically the tax treatment of commissions paid to middle men.

There were reports BAE had been given one month to agree a deal or face prosecution, but sources close to the company have insisted that there is no deadline and no imminent resolution to the case.

BAE has also said it broke no laws at the time the arms sales were done.

A spokesman for BAE Systems said: "Our view is that the interests of the company as well as all of its stakeholders, including the general public, are best served by allowing the ongoing investigations to run their course.

"The company is working with regulators towards that end and is providing access to people, information and premises whenever requested. It wholeheartedly supports a rigorous approach, in the hope that it brings to a conclusion inquiries which, in the case of the SFO, are now in their sixth year."