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Saab fingers BAE over South African fighter deal

Arms globocorp not feeling at home in Sweden any more

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UK-headquartered arms globocorp BAE Systems is back in the spotlight over allegedly corrupt business practices after its partner Saab announced that it had submitted documents to the Swedish national anti-corruption prosecutor and specifically named BAE.

Saab makes the Gripen fighters now being delivered to the South African air force, under a deal which was done with BAE providing marketing and sales expertise to Saab. Last week Saab issued a statement saying:

Saab decided to launch an investigation after details emerged in the media about a contract with a South African consultant about which Saab had no prior knowledge.

Saab has now completed a review of the contract and the financial transactions of the company Sanip Pty Ltd [owned by Saab] during the period in question.

Our review revealed that approximately 24 million rand was paid from BAE Systems to Sanip. These payments were transferred to the South African consultant shortly thereafter.

"These transactions have never entered into the accounts," says Saab's President and CEO Håkan Buskhe in accompanying tinned quotes, adding:

"A person emplyed by BAE Systems has without Saab’s knowledge signed a for us unknown contract, signed for us up until now unknown transactions as well as signing the audited and apparently inaccurate financial statement for 2003."

Saab says it has passed everything it has on the matter to Chief Prosecutor Gunnar Stetler at the Swedish National Anti-Corruption Unit, and says that it will remain "at the complete disposal of the Chief Prosecutor in this case".

BAE said in a statement supplied to the BBC:

This and other matters were fully reviewed by the UK Serious Fraud Office (SFO) and formed part of the overall resolution that the company reached with the SFO in February 2010. Any questions relating to Saab and its subsidiaries should be directed to Saab.

An SFO spokesman confirmed to the Reg this morning that last year's agreement between the SFO and BAE included the provision that there would be no further prosecutions relating to matters which the SFO had been investigating to that date, which included the South African Gripen deal. Thus there would seem to be no prospect of any action by the SFO.

However BAE has a sizeable corporate presence in Sweden: the global defence mammoth owns the Hägglunds armoured-vehicles factory, the famous Bofors cannon plant and simulation business C-ITS. Until quite recently BAE liked to describe Sweden as one of its "home markets", though it no longer does so. BAE Systems AB, the company's substantial Swedish tentacle, lies firmly in the Swedish prosecutor's jurisdiction.

Alongside the agreement last year with the SFO, under which BAE agreed to pay £30m in fines in the UK, BAE also settled with the US Justice Department over a range of offences committed in different countries. The $400m US fine covered, among other things, corrupt dealings associated with its marketing of Saab Gripens in Eastern Europe and violations of US export-control laws during the same deals. (The Gripen, like all modern Western-made combat jets, contains substantial amounts of controlled US technology and its export to any third party requires US scrutiny and consent.)

BAE has just announced the formation of an advisory board which will oversee the paying-out of £29.5m compensation to the people of Tanzania, a move it agreed to make as part of last year's deal with the SFO. The firm had previously sold the poverty-stricken nation a radar system in a massively controversial £28m deal which saw large amounts of the money paid allegedly kicked back into overseas accounts. ®

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