US: BAE faces class-action suit in America

Publisher Name: 
The Daily Telegraph (UK)

BAE Systems is facing a class-action lawsuit in the US related to
alleged bribery, which could lift the lid on the inner workings of the
defence company.





The suit accuses current and former BAE directors of
"intentional, reckless and negligent breaches of their fiduciary
duties of care, control and compliance and candour''.





It claims that company officers and directors resorted to, or
encouraged managers to use, illegal tactics to boost the company's
reported results.





Law firm Coughlin Stoia Geller Rudman & Robbins is acting on
behalf of a Michigan-based pension fund in an attempt to recover
losses suffered in connection with more than $2bn ( pounds 1bn) in
alleged bribes paid to the former Saudi ambassador to America, Prince
Bandar bin Sultan, and other Saudi officials.





BAE chief executive Mike Turner and Prince Bandar are both named in
the lawsuit, filed at the US District Court in Washington.





Other defendants include current and former non-executive directors
Sir Nigel Rudd, chairman of Boots, Conservative peer Lord Alexander
Hesketh, and Michael Portillo, former UK defence secretary.





A BAE spokesman said: "The company intends vigorously to defend
any such proceedings served upon it.''





Prince Bandar was not available for comment but has previously denied
any wrongdoing.





The case will open up the company to public scrutiny, forcing the
disclosure of anything from email exchanges to telephone logs.
Defendants may also be required to give video testimonies.





The US Department of Justice launched an investigation in June into
BAE's compliance with anti-bribery laws, including past dealings with
Saudi Arabia.





Britain's Serious Fraud Office abruptly halted a similar probe last
December after then Prime Minister Tony Blair said pursuing it could
harm Saudi-UK relations. BAE served as prime contractor on
arms-for-oil deals signed between the governments of Britain and Saudi
Arabia beginning in the 1980s.





The City of Harper Woods pension fund is a small shareholder with
fewer than 10,000 BAE shares. Other shareholders can and are expected
to join the suit.


Coughlin Stoia Geller
Rudman & Robbins has recovered over $7bn for Enron investors in
the wake of the energy company's collapse in 2001.
AMP Section Name:Corruption
  • 106 Money & Politics