One company chief embroiled in claims over Saudi bribes is former MoD civil servant

By Frederika Whitehead and Guy Eaton | 31 August 2012

“Each of the three GPT executives who approved payments that are at the centre of an SFO investigation declined to comment to Exaro”

Three executives at a UK defence contractor in Saudi Arabia who between them allegedly approved £14.5 million of irregular payments are today named by Exaro.

They were working for subsidiaries of EADS, the European defence giant, with one previously being a civil servant at the Ministry of Defence (MoD).

All three are, or were, directors of the EADS subsidiary, GPT Special Project Management, the prime contractor on a huge contract to overhaul the Saudi national guard’s communications systems.

The executives alleged to have authorised irregular payments are Malcolm Peto, 62, Jeff Cook, 56, and Laurence Bryant, 44.

A financial officer at GPT, Mike Paterson, blew the whistle internally by drawing up a schedule showing the contractor’s payments to two mysterious companies registered in the Cayman Islands, which were exposed by Exaro in May, and detailing luxury cars given to the commander of the signal corps at the Saudi national guard and his deputy.

Paterson’s schedule also identified the executives who approved the payments and car gifts.

The document is among papers passed to the Serious Fraud Office (SFO), which earlier this month launched a full criminal investigation into allegations of bribery surrounding the contract.

An ex-GPT executive, Ian Foxley, a former programme director for the contract, known as the Sangcom project, also became a whistleblower and passed the schedule to the SFO.

The SFO must decide whether to interview Peto, who has left the EADS group, and Cook and Bryant. At his home near Tunbridge Wells in Kent, Peto declined to comment to Exaro about the allegations.

The other two still work for GPT and remain in Saudi Arabia, but also declined to comment.

Paterson was the first of three GPT executives to blow the whistle on alleged corruption. He reported his concerns through the EADS compliance process after refusing to approve offshore payments that, he said, did not relate to real sub-contract work. Mystery surrounds the identities of the final beneficiaries of the Cayman companies.

Paterson is not thought to have talked to the SFO directly. He still works for GPT, but complains internally that he has been sidelined, with Bryant effectively taking over responsibilities as financial officer.

At Paterson’s request, Exaro agreed not to name him in a series of earlier reports. However, his identity was revealed this month by national newspapers following up our revelations.

According to Paterson’s schedule, Cook and Peto approved 10 payments totalling just under £5.2 million to Caymans-registered Simec International. Four payments were authorised on July 10, 2007 and six on December 9, 2009.

Peto and Cook also authorised cheques totalling more than £200,000 to gift four four-wheel-drive cars to two Saudi commanders and two civilian advisers, the document shows.

Cook and Bryant approved 15 payments to Simec totalling just under £8.9 million between December 31, 2007 and July 4, 2010, according to the schedule. They are also said to have authorised a payment of £140,910 to another Caymans-registered company, Duranton International, on July 4, 2010.

Two further payments totalling just over £300,000 were also transferred, but the schedule does not say who approved these.

MoD officials knew about the offshore payments, which continued for at least another 19 months after they warned that the ministry was unlikely to approve them in future.

Cook is GPT’s managing director. According to a former colleague, Cook had been a middle-ranking MoD civil servant in the Defence Procurement Agency Satellite Acquisition Integrated Project Team at the MoD Abbey Wood complex in Filton, Bristol.

In that role, said the former colleague, Cook frequently visited the Sangcom project’s offices in the Saudi capital of Riyadh to audit the accounts for the MoD.

The former colleague said that Cook left the MoD to join the EADS group in 2006 because he felt that his career was not progressing quickly enough. Cook is understood to have been promoted to the GPT job after EADS bought the company in early 2007.

Peto was chief executive of Astrium Services UK, another telecoms company in the EADS group, and was director of Paradigm Services, which owns GPT.

EADS says that that it is co-operating with the SFO investigation, but a spokesman said that it would not comment on the allegations.

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