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Fraud Office to quiz staff at BAE Systems

The Serious Fraud Office is about to begin a second series of interviews under caution with executives from BAE Systems implicated in allegations of corruption involving contracts with the defense giant. 

Sources close to the investigation said the new push would see BAE staff questioned for the first time on evidence uncovered in the SFO's investigation into allegations of corruption outside Saudi Arabia. Last year the anti--corruption watchdog controversially dropped its central investigation into bribery allegations surrounding the Al-Yamamah contract, a government-to-government deal. The inquiry was called off when the Government said it would damage relations with Saudi Arabia and harm national security. Since then the SFO has opened a second front on BAE by pressing forward with investigations into its dealings in other jurisdictions including Romania, the Czech Republic, Tanzania and South Africa.

The most senior BAE figure known to have been interviewed for the Saudi inquiry is Sir Richard Evans, the former chairman, but the SFO has also questioned more junior staff. A spokesman for BAE said: “We have been co-operating with the SFO. We continue to take the allegations seriously. (Of those) questioned so far, none have had any charges brought against them.” But the renewed vigor of the SFO's inquiry will come as a blow to the defense giant, which is under considerable pressure in America. The US Department of Justice last week launched a corruption probe into the company.

Legal sources said that if BAE or its executives were asked to hand over evidence to the US, only intervention by the British government could stop them doing so. Ultimately, however, they said only the Government could be held to account. News of the US investigation sent BAE's shares plummeting by 11% last week, although they recovered marginally to close at 405p on Friday. The US Securities & Exchange Commission is also reportedly investigating BAE for possible violations of the Foreign Corrupt Practices Act. (