BAE snubs £300 million settlement offer

Under investigation for allegedly bribing foreign officials to secure lucrative defence contracts in Africa and Eastern Europe, BAE Systems has reportedly turned down an offer to settle the case for £300 million.

However, the report appearing in The Times newspaper also said that the UK defence contractor would be willing to settle the six-year investigation by the UK’s Serious Fraud Office (SFO) into its corporate conduct, but only if it is presented with compelling evidence to support the bribery claims.

The company, which is alleged to have bribed officials in Africa and Eastern Europe to win arms sales contracts, is also unwilling to settle the case if it came at too great a cost, the report said.

The BAE board is refusing to pay the rumoured £300 million settlement sought by the SFO to end the case, the report said. BAE directors were advised that it may leave themselves exposed to lawsuits alleging misuse of shareholder funds if they agreed to the amount, the report added.

The newspaper report also noted that there has been suggestion inside BAE that a payment of £20 million would be more suitable. The company was also willing to admit to a measure of guilt that its agents and middlemen had acted improperly. The report said that BAE was keen to avoid the trial over fears it would damage its reputation.

Separately, The US Department of Justice (DoJ) is believed to have also turned its attention to whether the same BAE deals in Africa and Eastern Europe breached American anti-corruption rules. The report in The Independent said that there has already been an informal exchange of information between the SFO and the DoJ, and that this is expected to become formalised soon.