Sunday. 23 October 2016

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SFO faces pressure over £2bn UK-Saudi defence deal

Questions for Serious Fraud Office over investigation into Sangcom project

A decision on whether to investigate any matter… is a matter for the director of the Serious Fraud Office

Dominic Grieve, attorney general

Britain’s Serious Fraud Office is under pressure to say whether it has launched a full investigation into bribery allegations over a huge Saudi defence deal.

The attorney general, Dominic Grieve, has indicated that he is reluctant to block any investigation that the Serious Fraud Office (SFO) wants to conduct.

The SFO started a preliminary investigation into the case last year after the project’s former programme director, Ian Foxley, supplied it with evidence in support of his allegations.

But Foxley, a former lieutenant-colonel in the British army, is still waiting to hear whether the SFO will mount a full investigation.

Exaro revealed yesterday that the prime minister, David Cameron, was alerted to the bombshell allegations in January in a detailed briefing on the case. The former army officer sent a letter setting out his claims, together with a dossier of material, to Vince Cable, business secretary, copied to Cameron.

Foxley is worried that the SFO will drop the case, just as it was forced to close an investigation into similar allegations in 2006 by Tony Blair’s Labour government. That case centred on the even larger UK-Saudi ‘Al Yamamah’ defence deal.

In the letter, Foxley was hopeful that the SFO had already elevated the new case to a full investigation, writing: “I understand that, in August 2011, the director of the Serious Fraud Office sought guidance on the appropriate use of SFO resources from the current attorney general, Dominic Grieve MP, in view of the previous attorney general’s disinclination to prosecute a significant SFO investigation of the similar ‘Al Yamamah’ case.”

Foxley was the programme director of the Sangcom project, under which the Ministry of Defence is overhauling the Saudi Arabian national guard’s communications systems. The latest 10-year phase of the programme began in 2010, and is reportedly worth £2 billion.

Two weeks ago, Exaro revealed details of 28 transfers totalling just over £14.5 million paid by GPT Special Project Management, the British company acting as prime contractor, to two companies in the Cayman Islands between 2007 and 2010. Mystery surrounds the identities of the final beneficiaries of the payments.

Foxley’s letter is among a large volume of submissions published as part of a government consultation exercise on reforming the Financial Reporting Council, the regulator responsible for promoting corporate governance in the UK.

He continues in the letter: “I further understand, from indirect sources, that guidance has now been given by Her Majesty’s government and that a full SFO investigation is underway. Please could you confirm that this is indeed the case?”

The SFO has so far only confirmed that it is “considering” the allegations. But Exaro also published the response of Richard Alderman, then SFO director, to the letter, thanking Foxley for his help on the investigation.

Emily Thornberry, shadow attorney general, challenged Grieve over the case in the House of Commons last November, asking: “Will he be instructing the Serious Fraud Office to proceed with a full investigation into the allegations by whistleblower lieutenant-colonel Foxley of… kickbacks paid to senior Saudi officials?”

Grieve replied: “First, a decision on whether to investigate any matter – I am afraid I cannot comment on an individual case – is a matter for the director of the Serious Fraud Office and the Serious Fraud Office itself.

“Second, if, in the course of such an investigation, issues concerning the public interest were to come to light that required my being consulted and any decision being made, I can assure the honourable lady that I would come to inform the House of any decision that I took, particularly if any such decision, at any time, were, in any way, to override a decision of the director of the Serious Fraud Office, or if there were a public-interest matter that led to the case coming to a conclusion other than that which one might have expected.”

Thornberry told Exaro: “It is over a year since Ian Foxley made his serious allegations to the authorities of corruption at GPT. David Green, the new director of the Serious Fraud Office, should check that this matter is at the top of his in-tray.”

Meanwhile, auditors are accused of complicity in corruption in the Sangcom project, although they deny the allegation.

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