Campaigners welcome audit investigation into BAE accounts

Campaign Against Arms Trade (CAAT) and The Corner House have welcomed the decision by the Accountancy and Actuarial Discipline Board (AADB) to investigate KPMG’s audit of arms giant BAE Systems.

AADB will study KPMG audits in relation to the commissions paid by BAE through any route to subsidiaries, agents and any connected companies between 1997 and 2007. These companies include British Virgin Islands registered Red Diamond, Poseidon and Novelmight, which was established to keep payment records in a secret vault in Switzerland.

Kaye Stearman of CAAT says:

It is excellent news that AADB is investigating KPMG’s audits of BAE, even if belatedly. These subsidiary companies were crucial in channelling so-called commission payments. It is vital that this investigation is done thoroughly and well and that any wrongdoing is punished.

Sarah Sexton of The Corner House says:

This must have an impact on the Serious Fraud Office’s plea bargain with BAE on accounting irregularities in their Tanzanian contract. We hope this investigation will spur the Serious Fraud Office to bring the settlement back to court as soon as possible.

Notes

1. Campaign Against Arms Trade (CAAT) works for the reduction and ultimate abolition of the international arms trade together with progressive demilitarisation within arms producing countries. The Corner House aims to support democratic and community movements for environmental and social justice through analysis, research and advocacy.
2. According to the Stockholm International Peace Institute (SIPRI), BAE Systems is the world’s largest arms producer. It makes fighter aircraft, warships, tanks, armoured vehicles, artillery systems, missiles and munitions. Its foremost overseas markets are Saudi Arabia and the United States, with large sales also to Australia, India and South Africa.
3. In February 2010 BAE was fined $400 million by the US Department of Justice for conspiring to defraud the US and for making false statements under the Foreign Corrupt Practices Act, while simultaneously agreeing to a plea bargain with the UK Serious Fraud Office. The settlement, whereby BAE would plead guilty to accounting irregularities in its 1999 sale of radar equipment to Tanzania, and be fined £30 million, has yet to be signed off in court.

ENDS