BAE Systems fined for Tanzania accounting offence

BAE admitted it had failed to keep proper accounts

BAE Systems has been fined £500,000 for failing to keep proper records of payments it made to an adviser in Tanzania.

The defence group paid £7.7m to two firms controlled by businessman Shailesh Vithlani ahead of winning a £28m Tanzanian military radar contract.

The ruling by a judge at Southwark Crown Court comes after BAE had already agreed a deal with the Serious Fraud Office (SFO).

BAE also has to pay £225,000 costs.

The judge, Mr Justice Bean, said he was under pressure to keep the court fine to a minimum.

Under the agreement struck between the SFO and BAE, the company would deduct the fine from the £30m it had offered to the people of Tanzania to settle the case.

"The structure of this settlement agreement places moral pressure on the court to keep the fine to a minimum so that the reparation is kept at a maximum," said the judge.

He also criticised another part of the deal which he said gave any member of BAE Systems group "blanket immunity for all offences committed in the past, whether disclosed or not".

He said the agreement was loosely and hastily drafted.