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UK investigates bribery allegation against EADS

UK: Britain’s Serious Fraud Office launched an investigation into alleged bribery of Saudi officials by a UK-based unit of the European defence group EADS. The probe is focused on a GBP 2 billion (USD 3.3 billion) contract to provide communications and intranet services for the Saudi National Guard, which protects the kingdom’s royal family.

The contract was awarded to GPT Special Project Management, a subsidiary of Paradigm Services, itself a subsidiary of Astrium, the satellite arm of EADS. GPT is one of the companies endorsed by Britain’s Ministry of Defence to do highly sensitive military work in Saudi Arabia.

The allegations surfaced in employment tribunal proceedings and were made by Ian Foxley, a former lieutenant colonel in the British Army who later joined GPT and is now suing the company for unfair dismissal.

EADS said: “We have heard certain allegations and we are getting them properly investigated.” The UK government and MoD are closely involved, and this is “a highly sensitive” matter, said a person close to the subject. “This is obviously something that needs to be done very cautiously and sensitively.” A second person close to the investigation said it was at an “early to mid-stage”.

Any prosecution would have to be brought under Britain’s old bribery act, which puts a heavier burden of proof on prosecutors than many similar laws such as America’s Foreign Corrupt Practices Act.

Britain’s tougher new bribery act comes into effect on July 1, and only covers alleged crimes committed after that date.

Last year, rival defence concern, BAE Systems, agreed to pay a USD 400 million fine in the US and plead guilty to one charge of conspiring to make false statements to the government after a probe of some of the company’s business in Saudi Arabia and central Europe.

Source: FT.com