LONDON (AFP) - Britain`s largest defence contractor, BAE Systems, is being investigated over allegations of false accounting in relation to defence contracts held with Saudi Arabia`s government, prosecutors said.
Two men, aged 73 and 66, were arrested following searches at eight locations across London and the southern England by Serious Fraud Office (SFO) investigators and the Ministry of Defence Police.
"The Serious Fraud Office, with the Ministry of Defence Police, has commenced an investigation into suspected false accounting in relation to contracts for services between Robert Lee International Ltd, Travellers World Ltd and BAE in connection with defence equipment contracts with the government of Saudi Arabia," the SFO, an independent government department, said in a statement.
News of the investigation followed recent BBC allegations, denied by BAE, that it paid millions of dollars into a slush fund for a leading member of Saudi Arabia`s royal family with the knowledge of its chief operating officer.
BAE, formerly British Aerospace, laid on luxury hotels, chartered aircraft, limousines and exotic holidays for Prince Turki bin Nasser and his entourage, the broadcaster`s Money Programme alleged last month.
The prince was responsible for running the Saudi side of Al Yamamah, the biggest arms sale in British history, worth billions of dollars in orders to BAE.
11/03/2004 - 16:24 GMT - AFP