International

Blair rejects "bribery'' probe

Hasan Suroor

LONDON: British Prime Minister Tony Blair has rejected calls for an investigation into allegations that BAE Systems, Britain's biggest arms supplier, used a secret fund to pay millions of pounds to a prominent member of the Saudi royal family for negotiating a multi-billion pound arms deal in the eighties.

Mr. Blair, who has been criticised for calling off an inquiry by the Serious Fraud Office (SFO) last December on grounds that it would have damaged relations with Saudi Arabia, insisted that a fresh probe would cause a "complete wreckage'' of Britain's "vital'' national interests.

Prince denies charge

His remarks came as Prince Bandar bin Sultan, a high-profile Saudi diplomat, who has been named as the recipient of alleged kickbacks of more than £1billion, "categorically'' denied receiving any improper payments.

In a statement, issued through his lawyers, he refuted allegations that payments made through an American bank account represented "improper secret commissions or `backhanders' ''.

Prince Bandar acknowledged that payments were made "pursuant to the al-Yamamah contracts'', the £43-billion defence deal which Saudi Arabia signed with BAE Systems in 1985, but said the money was made into the accounts of the Saudi Ministry of Defence and Aviation (MoDA). He was not the beneficiary of the funds.

"At no stage have MoDA or the Saudi Arabian Ministry of Finance identified any irregularities in the conduct of the accounts,'' he said.

The Guardian BAE investigation reports are available at http://www.guardian.co.uk/

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