British defence group BAE Systems was fined 500,000 pounds (775,000 dollars, 590,000 euros) on Tuesday for failing to keep proper records of payments to an adviser in Tanzania. Payments totalling about 12.4 million dollars were made to two companies controlled by Tanzania-based businessman Shailesh Vithlani between January 2000 and December 2005, Southwark Crown Court in London heard.
BAE admitted one count of breaching its duty to keep accounting records following a written settlement with the Serious Fraud Office (SFO) in February. The company was also ordered to pay an additional 225,000 pounds in costs. Judge David Bean said that under the written settlement with the SFO, the company had agreed to make a 30-million-pound payment for the benefit of the people of Tanzania, less any fines.
"The victims of this way of business, if I have correctly analysed it, are not the people of the UK, but the people of Tanzania," the judge said. The 40-million-dollar radar contract won by BAE for the airport in the Tanzanian capital Dar es Salaam in 1999 could have been far cheaper if 12 million dollars had not been paid to Vithlani, he added.