Published by AFX - 12 March 2007
Defence and aerospace firm BAE Systems PLC has declined to comment on a report claiming that the Serious Fraud Office (SFO) is investigating allegations that it misled the British government over arms deals.

A spokeswoman for BAE said the group, which is facing a Serious Fraud Office (SFO) inquiry into its alleged involvement in bribery of overseas officials to win defence contracts, stressed that no new investigation had been opened and BAE cannot comment on the ongoing probe. BAE continues to reject all allegations of wrongdoing, she said.

The Financial Mail on Sunday reported SFO director Robert Wardle as saying he is looking into suggestions that BAE gave "untruthful information" to the Export Credits Guarantee Department (ECGD) about arms deals.

"We will look at whatever criminal offences may have been committed, whether related to the Prevention of Corruption Act, the ECGD or whatever," the newspaper quoted Wardle as saying.

By switching to alleged deception of a government department, the SFO may be able to sidestep objections that the government made in January in forcing the SFO to halt an inquiry into whether BAE ran an alleged 60 mln stg slush fund for members of the Saudi Royal family in the 1980s, the Financial Mail said.

The British government's most senior legal advisor, Attorney General Lord Peter Goldsmith, claimed at the time that the Saudi probe could damage national and international interests.

Although the Saudi probe has been halted, the SFO has confirmed its involvement in an investigation into BAE's dealings in the Czech Republic. The SFO reportedly also is examining the firm's dealings in Romania, Chile, Qatar, South Africa and Tanzania.