Accountancy Board demands BAE's books

By staff writers
26 Oct 2010

The multinational arms company BAE Systems is to have its accounts formally investigated by the Accountancy and Acturial Discipline Board (AADB). The news has been welcomed by groups campaigning against the arms trade and corporate fraud.

The Campaign Against Arms Trade (CAAT) and The Corner House described it as “excellent news”. In 2007, the two groups launched a major legal action over the Serious Fraud Office's failure to investigate alleged corruption in BAE's Saudi arms deals.

The AADB will study accounts drawn up by the firm KPMG “in relation to the commissions paid by BAE through any route to subsidiaries, agents and any connected companies” between 1997 and 2007.

These companies include British Virgin Islands-registered Red Diamond, Poseidon and Novelmight, which was established to keep payment records in a secret vault in Switzerland.

“These subsidiary companies were crucial in channelling so-called commission payments,” said Kaye Stearman of CAAT, “It is vital that this investigation is done thoroughly and well and that any wrongdoing is punished.”

BAE has faced allegations of corruption in five continents. Earlier this year, the Serious Fraud Office (SFO) dropped investigations into BAE's dealings with the Czech Republic, Romania, South Africa and Tanzania in return for a £30 million payout and an admission of “accounting irregularities”.

Sarah Sexton of The Corner House insisted that the AADB's investigation “must have an impact on the Serious Fraud Office's plea bargain with BAE on 'accounting irregularities' in their Tanzanian contract. We hope this investigation will spur the Serious Fraud Office to bring the settlement back to court as soon as possible.”

[Ekk/1]

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