Dropped BAE fraud inquiry challenged

Last Modified: 14 Feb 2008
By: James Blake

Campaigners today tell the high court that the Serious Fraud Office's decision to drop a fraud inquiry into BAE Systems' dealings with Saudi Arabia is illegal.

Lawyers for two groups, Corner House Research and Campaign against the Arms Trade, claim the SFO's decision to halt their investigations into the £43bn Al-Yamamah arms deal was influenced by hopes of winning new contracts with the Saudis.

Last year Saudi Arabia agreed to pay a BAE consortium £20bn for 72 Eurofighters, but it took years of negotiations and the deal was only finalised after the British government pushed to stop a fraud investigation into allegations of bribery.

Now two campaign groups went to court this morning, arguing that the SFO acted against the law when it stopped its investigation into BAE and Saudi Arabia.

The judge has already said their case is "eminently arguable", with documents expected to be produced in court showing the extent to which BAE lobbied for the fraud investigation to be dropped.

Already it has been revealed then Attorney General Lord Goldsmith was reluctant to drop the investigation, but faced repeated pressure from Tony Blair to do so.