Friday, October 23, 2020

Airbus shuts down subsidiary at centre of bribery investigation

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Airbus is shutting down a subsidiary that has been at the centre of a long-running bribery investigation.

The UK-based subsidiary of the European aerospace group, GPT Special Project Management, has been under investigation for seven years over allegations it paid multimillion pound bribes to secure a military contract with the Saudi Arabian government.

An anti-corruption campaign said the planned closure could prevent the Serious Fraud Office (SFO) bringing a prosecution against the subsidiary, and accused the government of deliberately interfering in the investigation by “sitting on” the case.

GPT’s latest annual report, published last week, disclosed that it would go out of business on 31 December. It is not possible to prosecute a firm that has been closed down, although individuals can be.

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GPT has operated with only one contract for years, which the UK’s Ministry of Defence has decided not to renew. The MoD is understood to have awarded it to the US military contractor KBR instead.

GPT said it did not intend to seek new business with other customers.

In 2012, the SFO started investigating accusations from a whistleblower that GPT had used illicit payments and gifts totalling at least £14m to win a £2bn contract to provide communications and electronic warfare equipment to the Saudi national guard.

Any prosecution would require the consent the attorney general, Geoffrey Cox, under the Prevention of Corruption Act, but his department has taken more than a year to make a decision. Cox has yet to announce what he intends to do.

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Sue Hawley, the policy director of Corruption Watch, said: “It is disgraceful that the attorney general has sat on this case so long that the company is now effectively becoming insolvent, leaving no company for the SFO to charge and sanction. This level of political interference in a foreign bribery case is completely unacceptable.”

Cox’s department declined to comment because the investigation was ongoing.

Any prosecution could be politically awkward for the UK government because it could provoke a diplomatic row with the Saudis and might reveal that the government had approved of illicit payments.

Anti-corruption campaigners say the decision on prosecuting GPT is a key test as to whether Britain is serious about tackling bribery and not repeating the BAE scandal. In 2006, Tony Blair’s government terminated an SFO investigation into alleged bribes by BAE, Britain’s biggest arms firm, in a huge Saudi contract following complaints by Riyadh.

GPT’s sole contract has been run under an agreement between the UK and Saudi governments. The MoD has been responsible for awarding the contract and approving payments as part of it.

The MoD has previously declined to comment when asked if it had refused to hand over documents to the SFO during its investigation. The SFO has reportedly interviewed two MoD staff and four former GPT executives.

In its annual report, GPT said it “has been serving a single customer since its formation due to its status as prime contractor to the UK Ministry of Defence … On expiry of the current 10-year programme in December 2019, the company [GPT] will cease operations.”

The MoD declined to comment. Airbus has previously said it had not been notified of a decision to proceed with charges in this case and that it continued to cooperate with the SFO.

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