Tuesday, September 13, 2011


By Caroline Binham, Legal Correspondent

BAE Systems has bowed to political pressure and will immediately pay £29.5m ($46.8m) to the government of Tanzania as part of a settlement with the UK Serious Fraud Office.

The International Development Committee released a letter from BAE’s chairman on Friday in which he wrote that the defence company was ready to make the whole payment directly to the African nation rather than in separate tranches.

“I have now written again to the secretary of state, indicating our readiness to remit a banker’s draft payable to the government of Tanzania. We are ready to do this as soon as DFID indicate their agreement,” wrote Dick Olver.

The company had planned to make payments to non-governmental organisations working in Tanzania, setting up a committee headed by Lord Cairns to identify worthy causes. A delegation of Tanzanian politicians came to the UK earlier in the summer to lobby for the money to be paid directly to their government for education projects, an aim the Department for International Development endorsed.

But a bruising committee hearing in July saw politicians gain an undertaking from SFO Director Richard Alderman that he would pursue BAE for contempt of court if it did not hand over the money to Tanzania by the autumn.

BAE agreed to pay an ex gratia payment of £30m, minus a £500,000 fine already paid for false accounting, to settle the six-year SFO probe, originally investigating alleged bribery across four continents. The company paid more than $400m to settle related US investigations

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