Banmoco News As It Happens

BAE Systems is facing a fine for failure to keep proper details of the payments it made to an adviser, as part of a Tanzanian radar deal.

The company pleaded guilty to the count, coming under the Companies Act, which involves breaching its duties to keep accounting records.

At Southwark Crown Court, a judge suggested that the obvious deduction was that parts of the disclosed £7.7m payment were used as bribes to seal the lucrative £28m contract. While BAE admitted that it paid Sailesh Vithlani a handsome sum, the prosecution never alleged that any corruption took place. BAE, which has agreed a special deal with the authoritative Serious Fraud Office, involving ex-gratia payments of up to £30m to the East African country, deny any such behaviour.

Prosecutor Victor Temple, representing the Serious Fraud Office, suggested that it wasn’t part of his case to allege that any part of payments made to Mr Vithlani were improperly used. BAE admitted that the majority of the money handed to Vithlani was then funnelled through a hidden company it had set up in the tax-free British Virgin Islands while also acknowledging that it didn’t keep proper accounts of transactions that took place – which it in fact disguised as payments made for technical services.

However, the judge that heard the case, Justice Bean, pointed out that the obvious inference is that parts of the money were used to bribe and influence decision makers in Tanzania, while also making arrangements to ensure that none of its fingerprints would appear on any of the cash handed over.