UK launches probe into EADS, Saudi defence deals

Defence firm allegedly paid jewellery, cash in bribes to Saudi officials to net $3.2bn contract
UK launches probe into EADS, Saudi defence deals
The £2bn ($3.2bn) communications contract was one of the largest awarded in recent years by Saudi Arabia
By Shane McGinley
Mon 30 May 2011 12:56 PM

The UK’s Serious Fraud Office is investigating claims European defence group EADS paid bribes to Saudi officials to net a £2bn ($3.2bn) communications contract.

A former employee of an EADS subsidiary told British newspaper The Telegraph he was sacked after revealing bribes including luxury cars, jewellery and briefcases full of cash were paid to Saudi officials to secure the deal.

A source at the SFO told the paper a preliminary investigation was underway into the claims, but declined to comment on the allegations.

"We take such allegations very seriously and we are looking at them carefully. It would be inappropriate to comment further while this process takes place," a spokesperson from the UK’s Ministry of Defence, which helped coordinate the contract, was quoted as saying.

The £2bn ($3.2bn) communications contract was one of the largest awarded in recent years and was to upgrade satellite systems used by the Saudi National Guard to protect the royal family.

A spokesperson from EADS said the company was also carrying out an internal investigation.

The claims are reminiscent of the long-running UK and US corruption probes into arms deals between defence group BAE Systems and Saudi Arabia.

The company was alleged to have made illegal payments to Saudi princes using a secret slush fund to secure the multibillion-pound Al Yamamah deal for Tornado and Hawk jets and a huge airbase construction programme.

The SFO dropped its inquiry in 2006 under pressure from the UK government, which was concerned about the impact of the investigation on political relations and future arms deals.

In February last year, BAE Systems agreed to admit two criminal charges and pay fines of

£286m to settle US and UK probes into the company, but stopped short of admitting to corruption.

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