Corp-Ethics.com - Report: Probe into BAE arms deals widens

Company	BAE Systems [Company Info]
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Date	Issue	Title
19th Oct 2006	Fraud Investigation	Probe into BAE arms deals widens

Report

The Serious Fraud Office (SFO) has widened its investigation into corruption allegations at UK defence giant BAE Systems.

Together with Ministry of Defence Police, the SFO raided three business addresses and a home earlier this week.

The SFO said the raids were not related to existing inquiries into BAE defence contracts in Romania and Saudi Arabia.

It is already investigating claims that BAE made secret payments to cement arms deals with those countries.

"As part of an ongoing investigation by the Serious Fraud Office and Ministry of Defence Police into suspected corruption relating to defence contracts where BAE Systems is the prime contractor, four premises were searched on 17 October," an SFO spokesman has said.

The raids targeted a business and a home address in London and two businesses in Berkshire, one of which was reported to be that of Breco Services.

One of that company's directors is John Bredenkamp, a white Zimbabwean tycoon living in Britain with an estimated fortune of £700m.

In 2002, a United Nations report described him as a major arms dealer to African countries including the Democratic Republic of Congo and Zimbabwe.

It also claimed that he had links with BAE Systems via his investment in South African company Aviation Consulting Services (ACS) - an arms trading company whose client list includes BAE.

The UN report claimed that ACS broke a UK and European arms embargo on Zimbabwe by supplying the country with BAE aircraft parts in early 2002.

A report in the Guardian newspaper has suggested that the SFO's interest in Mr Bredenkamp is related to commissions allegedly paid during the £1.6bn sale of BAE Hawk jets to South Africa in 2001.

BAE refused to comment on whether it had had any business dealings with Mr Bredenkamp.

"The SFO enquiry is an ongoing process with which BAE Systems continues to co-operate fully. As this matter is an ongoing investigation we can make no further comment at this stage," a BAE statement said.

In 2002, the SFO began looking into allegations that BAE had operated a secret £60m fund to provide gifts for Saudi Arabian officials, which had helped cement up to £40bn worth of arms contracts known as al-Yamamah.

The SFO later expanded these investigations to include claims that millions of pounds had been paid in secret commissions to help with the sale of two former Royal Navy frigates to Romania.

Other Reports on BAE Systems
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15th Sep 2005	Other Issue	BAE Systems	BAE 'payments to Pinochet firms'
4th Nov 2004	Fraud Investigation	BAE Systems	BAE denies it is target of probe