BAE invites fraud squad in to judge
BAE Systems has called on the Serious Fraud Office to launch a root-and-branch review of all cases against the defence giant as part of moves to restore its battered reputation.
At yesterday’s annual meeting, chairman Dick Olver acknowledged BAE’s reputation “had been damaged” and business was suffering from allegations it paid bribes to win lucrative arms contracts.
Responding to hostile questions from private investors, Olver said the SFO should sit down with lawyers and go through the evidence gathered over four years to see if there was a case to answer.
“The SFO has had every single piece of information it asked for,” he said. “Nobody has been charged because there is no case to answer.”
Controversially, the SFO dropped a probe into allegations BAE paid bribes to Saudi Arabian princes under, it is said, pressure from former prime minister Tony Blair. It is still investigating corruption allegations against the company in Romania, Tanzania, South Africa and the Czech Republic.
Outgoing chief executive Mike Turner said it was crucial BAE improved its reputation in order to secure business as it expanded globally.
“We are now one of the world’s biggest defence companies and that brings responsibilities,” he said.
BAE had already suffered financially by pulling out of deals in some parts of the world and refusing to use certain advisers, he added.
It would also implement all 23 recommendations made in Lord Woolf’s review of BAE’s business practices to achieve a “gold standard” in ethics.
“We will suffer short-term disadvantages but will gain a long-term benefit,” Olver said.
Investors attacked BAE for continuing to deal with Saudi Arabia, a country with a poor human rights record.
Olver argued it was better to trade with such countries. “You cannot influence them without engaging with them,” he said.
In a trading update, BAE said growth was good so far, with demand for landmine-protected vehicles strong and orders worth £400million in the pipeline.
