Business

BAE Systems in Tanzania education payout

  • 15 March 2012
  • From the section Business
A military radar system
BAE admitted it had failed to keep proper accounts

BAE Systems is to pay at least £29.5m towards educational projects in Tanzania following an agreement with the Serious Fraud Office (SFO).

BAE was fined £500,000 back in 2010 for failing to keep proper records of payments it made to an adviser.

These payments were to win a £28m Tanzanian military radar contract.

The SFO said the agreement was the first of its kind, but it was criticised by the the judge sentencing the defence company two years ago.

"This agreement is a first for the SFO which piloted it through the UK legal system," SFO director Richard Alderman said.

"It provides a satisfactory outcome for all concerned but most of all for the Tanzanian people," he added.

BAE has now confirmed the terms of how it will seek to help Tanzanians, as agreed.

It will buy textbooks for 16,000 primary schools in the key subjects of Kiswahili, English, Maths and Science.

Funds will also be used to provide all 175,000 primary school teachers with teachers' guides, syllabi and syllabi guides, the defence firm said.

'Closed matter'

"We are glad to have finally been able to make the payment to the government of Tanzania and bring this matter to a close," BAE said.

BAE reached the deal with the SFO in 2010. It agreed to pay the fine - and £225,000 costs to the SFO - and the fine was deducted from the £30m it had offered to the people of Tanzania to settle the case.

At the time, the judge at Southwark Crown Court criticised the agreement between the SFO and BAE.

"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," said Mr Justice Bean, who said he was under pressure to keep the court fine to a minimum.

He also criticised another part of the deal which he said gave any member of BAE Systems "blanket immunity for all offences committed in the past, whether disclosed or not".

The defence group paid £7.7m to two firms controlled by businessman Shailesh Vithlani ahead of winning the radar contract.

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