Arms giant admits false accounting

London: The arms giant BAE has agreed to pay out almost £300 million (Dh1,729 million) in penalties as the company finally admitted guilt over its worldwide conduct in the face of long-running corruption investigations.

For 20 years, the firm had refused to accept any wrongdoing, despite mounting evidence of alleged bribes and kickbacks, much of it uncovered by the Guardian.

But BAE said it would plead guilty to charges of false accounting and making misleading statements in simultaneous settlement deals with the Serious Fraud Office in the UK, and the department of justice in the United States.

The admissions in the US covered BAE's huge £43 billion Al Yamamah fighter plane sales to Saudi Arabia, and smaller deals in the Czech Republic and elsewhere in central Europe.

In the UK, the admissions cover a highly controversial sale of a military radar to poverty-stricken Tanzania, which development secretary Clare Short said at the time "stank" of corruption, but which the then prime minister, Tony Blair, forced through the cabinet.

The Serious Fraud Office said in its announcement some of the £30 million penalty BAE was to hand over in the UK would be "an ex gratia payment for the benefit of the people of Tanzania".

Another $400 million would be paid in penalties to the US authorities. BAE will not face international blacklisting from future contracts, because it has only admitted false accounting, not bribery.

MPs admitted to mixed feelings about BAE's admission of guilt and are still furious the SFO's own extensive inquiry into the Al Yamamah deal was shut down in 2006, following pressure from the company, and from Saudi officials who reportedly threatened to withdraw co-operation over security matters. The then attorney-general, Lord Goldsmith, cited reasons of national security when he announced the inquiry was being abandoned.

Blair said he took full responsibility for the decision. The Liberal Democrats' deputy leader, Vince Cable, said on Friday BAE Systems had succeeded in ensuring key details about its arms details would remain "hidden from the public."

— Guardian News & Media Ltd