From British daily The Independent:
Pressure over Saudi allegations mounts as BAE expands in US
By Michael Harrison, Business Editor
Published: 09 May 2007
BAE Systems, Britain’s biggest arms manufacturer, is to face fresh protests today over its alleged bribery of Saudi officials as pressure mounts on the Bush administration to investigate the affair because of the company’s growing presence in the US military market.
Protesters from the Campaign Against Arms Trade will hold demonstrations outside the company’s annual shareholder meeting in London calling for the reopening of a Serious Fraud Office (SFO) investigation into the bribery allegations.
The inquiry was dropped before Christmas on the grounds that it threatened to jeopardise the UK’s national security interests and the fight against terrorism.
Meanwhile, at the meeting at the QE2 Centre in Westminster, BAE board directors will face hostile questioning over the company’s role in Saudia Arabia where it is the lead contractor on the £20bn Al Yamamah arms-for-oil contract.
The AGM comes just as BAE expands its activities in the US with the £2.1bn takeover of the Humvee armoured vehicle-maker Armor Holdings but also as Congress takes an increased interest in claims that the company bribed Saudi officials involved in Al Yamamah.
Concern is mounting that the international unrest over the UK’s decision to drop the SFO investigation will hamper BAE’s attempts to expand in the US, where it has just strengthened its position as the Pentagon’s biggest foreign contractor with the Armor deal.
BAE shares dipped 3 per cent yesterday to 434.5p as the company completed a £750m fund-raising operation to help pay for the deal by placing 174 million shares at 430p.
Washington has already lodged a formal protest with the UK Government over the abandonment of the SFO investigation, following similar criticisms from the Organisation for Economic Co-operation and Development over the UK’s poor record on prosecuting bribery of foreign officials.
But Congress is stepping up the pressure on BAE with the House and Senate foreign relations committees threatening to withhold approval for BAE arms deals in the US unless the administration takes a closer look at the bribery claims.