BAE Ordered to Pay Radar Cash to Govt

The Citizen (Dar es Salaam)

Mkinga Mkinga

20 July 2011

Dar Es Salaam/London — British MPs have demanded that BAE Systems pay the Tanzanian government £29.5m (Sh73.8billion) in full and immediately or face legal action.

BAE, a British defence company, agreed 16 months ago to pay the sum as part of a settlement with the Serious Fraud Office (SFO). Reacting to the new developments, the Deputy Speaker of the National Assembly, Mr Job Ndugai, said yesterday Tanzania has welcomed the decision reached by the British MPs.

The Kongwa legislator (CCM) said: “We have been overjoyed to receive such news.” He said the governments of Tanzania and Britain have agreed that the money will be deposited in a Treasury account to be under the charge of the Parliament.

Last month a parliamentary team headed by Mr Ndugai travelled to Britain to present the government’s stand, which was that the money should be paid directly to it instead of through charity organisations as preferred by BAE Systems.

In its report, the team advised the government to pursue legal measures against all parties or individuals implicated in the BAE System’s fraudulent sale of radar to Tanzania.

Former Attorney General Andrew Chenge, who resigned from the Cabinet in 2008 over the scandal, is among Tanzanians named in the scandal.

However, the minister of State in the President Office (Good Governance), Mr Mathias Chikawe, ruled out the possibility of prosecuting Mr Chenge on the grounds that he was cleared by Britain’s SFO, which had investigated the matter.The minister said the investigations only implicated Mr Sailesh Vithlan, who was the broker in the deal, and two BAE Systems officials.

Mr Ndugai said legal proceedings should be instituted against the culprits in Tanzania and elsewhere as they were all responsible for the loss of billions of shillings of taxpayers’ money.

The British defence company, which agreed 16 months ago to pay the sum as part of a settlement with the SFO, was accused by members of the International Development Committee of “procrastinating” and creating delays that amounted to a “complete sham”.

BAE, whose sale of the radar system to Tanzania became a subject of an international corruption probe, said the settlement payment had been delayed because a court had to finalise the amount.

The company, represented by Philip Bramwell, general counsel, and Bob Keen, head of government relations, said BAE had set up an “advisory board” to ensure the money reaches the best possible causes in Tanzania and was hoping to release the first £10m tranche “within weeks”.

However, the MPs, who held the “one-off session” as part of a wider probe into financial crime, retorted that the company had been ordered to pay a fine for serious fraud, “not to set up a charitable trust”.

They said they thought the advisory board was a “complete sham” that was merely wasting more time. Mr Richard Alderman, director of the SFO, told the Committee that BAE’s handling of the payment to Tanzania was “unsatisfactory and frustrating”.

He agreed that BAE had to wait until the precise settlement had been finalised by a judge. But he said he was surprised that the company had not put in place any contingency plans to make the payments “there was nothing to preclude them for doing that”.

He backed MPs’ calls for BAE to make the payments quickly and said he was prepared to take the case “to the next stage” if he felt this was not going to happen.

Mr Alan Duncan, the Minister for the Department of International Development (DFID), said he was also “baffled” by the reasons BAE had given for not paying the fine immediately.

Additional reporting by agencies

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