Defence company BAE Systems today denied any wrongdoing in response to media reports that it paid £1 billion ($2 billion) over a decade to a Saudi prince in connection with Britain's biggest-ever arms export contract.
Britain's Guardiannewspaper and the BBC said BAE Systems made regular payments to Prince Bandar bin Sultan, a former ambassador to the United States and now Secretary-General of the Saudi National Security Council, with the knowledge of Britain's Ministry of Defence.
The reports said the payments were channelled through a US bank in Washington controlled by the prince, a key figure in the Al Yamamah oil-for-arms deals between Britain and Saudi Arabia, the first of which was signed in 1985 and that generated billions of pounds a year in revenue for Britain.
"The Al Yamamah programme is a government-to-government agreement and all such payments made under those agreements were made with the express approval of both the Saudi and the UK governments," BAE Systems said.
Britain's Serious Fraud Office dropped an inquiry last December into the Saudi deal, for which BAE has been the prime contractor, providing Tornado fighter jets, Hawk trainer aircraft and other defence equipment.
Prime Minister Tony Blair said at the time pursuing the inquiry would have harmed national security and relations with Saudi Arabia, which he called crucial for counter-terrorism and Middle East peace.