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Tuesday, November 28, 2006

Fraud Probe May Jeopardize Saudi-UK Eurofighter Deal: Report

AFP: Saudi Arabia may pull out of a contract to buy 72 new Eurofighter aircraft from British firm BAE Systems because of a row over an investigation into an alleged slush fund, the Daily Mail reported Nov. 25.

The Saudis could pull out of the $147 billion contract and take their business to France, with the potential loss of up to 50,000 jobs, the paper said.

The row has flared over a three-year investigation by Britain’s Serious Fraud Office (SFO) into claims that BAE Systems established a 60 million pound slush fund for some members of the Saudi royal family.

This allegedly provided perks including luxury cars to ensure that the Saudis kept doing business with BAE, the Mail said.

The paper added that Saudi Arabia is holding talks with France about the possibility of buying 24 Rafale jets.

“The Saudis are threatening to go elsewhere and you can’t blame them. They keep being insulted,” the Mail quoted an anonymous senior BAE Systems executive as saying.

And Mike Turner, the company’s chief executive, told the Sun that the investigation had “been going on long enough”.

Saudi Arabia threatened to suspend diplomatic links with Britain over the affair after SFO lawyers persuaded a Swiss magistrate to force disclosure of details about confidential Swiss bank accounts, this week’s Sunday Times reported.
BAE Systems has sealed a series of lucrative deals with Saudi Arabia since 1985.

“We continue to co-operate with the inquiry and believe we have done nothing wrong,” company spokesman John Neilson told AFP.
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