Shares of BA, Europe's largest defence firm, fell 4.4 per cent today on reports it might lose a Eurofighter deal with Saudi Arabia if a fraud probe is extended to the Saudi royal family.
The Sunday Telegraphnewspaper in Britain said the Saudi government was set to tear up its Eurofighter Typhoon agreement with Britain and give the jets contract to France if the Serious Fraud Office (SFO) opened Swiss bank accounts allegedly linked to members of the Saudi royal family as part of a long-running investigation.
The report said Saudi Arabia was now considering buying Rafale jets from French aerospace group Dassault Aviation and that French President Jacques Chirac was keen to secure a deal.
"Chirac is waiting in the wings. They are desperate to sell the Rafale," an unnamed government source was quoted by the Sunday Telegraphas saying.
A Dassault spokesman said the company was unaware of any decision by Saudi Arabia to opt for its Rafale jets.
"We haven't been told to expect anything," a Dassault spokesman said on Monday.
Abdul Kareem al-Ali, public relations officer at the Saudi Defence Ministry, could not immediately be reached for comment.
The ongoing SFO probe was discussed -- among a range of broader issues -- during a meeting between Saudi defence minister Crown Prince Sultan and British ambassador Sherrard Cowper-Coles during the weekend. When reached on the telephone, Cowper-Coles said he was not available to comment.
"The Saudis are very much irritated by this," said a Riyadh-based diplomat who declined to be named, referring to the SFO probe.