BAE Systems fined for failing to keep proper records

Defence giant BAE Systems was today fined £500,000 (€589,205) for failing to keep proper records of payments to an adviser in the east African country of Tanzania.

BAE Systems fined for failing to keep proper records

Defence giant BAE Systems was today fined £500,000 (€589,205) for failing to keep proper records of payments to an adviser in the east African country of Tanzania.

Payments totalling about $12.4m (€9.43m) were made to two companies controlled by Tanzania-based businessman Shailesh Vithlani between January 2000 and December 2005, Southwark Crown Court has heard.

BAE pleaded guilty to one count of breaching its duty to keep accounting records contrary to section 221 of the Companies Act 1985 following a written settlement with the Serious Fraud Office on February 16.

The company was also ordered to pay £225,000 (€265,166) costs.

Mr Justice Bean, giving judgment, said that under the written settlement with the SFO, the company had agreed to make a payment for the benefit of the people of Tanzania.

This would be £30m (€35.36m), less any financial orders imposed by the court.

"The victims of this way of business, if I have correctly analysed it, are not the people of the UK, but the people of Tanzania," he said.

The $40m (€30.4m) radar contract won by BAE for the airport at Dar es Salaam could have been a great deal less if $12m (€9.1m) had not been paid to Mr Vithlani, he added.

"The structure of this settlement agreement places moral pressure on the court to keep the fine to a minimum so that the reparation is kept at a maximum."

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