European Aeronautic Defense & Space Co. EADS said it is cooperating with the U.K.'s Serious Fraud Office (SFO) which has launched a probe into suspected irregularities involving a Riyadh-based subsidiary of the Franco-German aircraft maker and defense contractor.
The SFO is launching a criminal probe into allegations concerning the unit, called GPT Special Project Management Ltd, the U.K. agency said Thursday.
A former employee raised allegations last May that GPT had bribed Saudi Arabian officials to secure a $3.3 billion communications contract.
Among the alleged bribes were cars, jewelry and briefcases of money paid through intermediaries, according to reports at the time citing the former employee.
GPT is a unit of Paradigm Services Ltd., an EADS company specialized in military-grade satellite communications.
“We have been informed by the UK Serious Fraud Office that it has begun a formal investigation in connection with aspects of the business of GPT Special Project Management Ltd in Saudi Arabia, which is a local subsidiary of the EADS group conducting business exclusively for the Ministry of Defense,” a Spokesman for EADS said.
“We will continue to fully and constructively engage with the SFO, but in view of the investigation we will not be commenting further,” he said.
GPT isn't the first UK company to be investigated by the SFO for irregularities concerning its Saudi operations. The SFO in 2004 launched an investigation regarding BAE Systems' (BA.LN) alleged illegal payments in Saudi Arabia, a case that soon expanded to cover the Czech Republic, Romania, South Africa and Tanzania. BAE Systems pleaded guilty to improper accounting in 2010.
Source: Dowjones.com; Wall Street Journal