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Last Updated: Tuesday, 28 November 2006, 15:38 GMT
BAE admits Saudi Eurofighter fear
Eurofighter
A successful deal could be worth as much as 6bn
Defence group BAE Systems has confirmed that its chief executive Mike Turner fears Saudi Arabia is delaying talks to buy 72 Eurofighter Typhoon aircraft.

But BAE Systems would not be drawn on the reason for the delay, which press reports have suggested is due to Saudi anger at an ongoing corruption probe.

The investigation by the UK's Serious Fraud Office is into a previous arms deal between Britain and the Saudis.

Both the UK Ministry of Defence and the Saudis have declined to comment.

The ongoing negotiations over Saudi plans to buy 72 Eurofighters have no direct involvement from BAE Systems.

Instead the deal, which could be worth as much as 6bn to the company, is being negotiated between the Saudi government and the UK Ministry of Defence.

Rival French offer?

A spokeswoman for BAE Systems confirmed that its boss feared the talks had now slowed down, but denied newspaper suggestions that they had completely stalled.

"Mike was making clear that negotiations between the two sides had not been moving at the same pace as they had prior to [the break for] Ramadan," she said.

The Serious Fraud Office's ongoing probe into BAE Systems' sales to Saudi Arabia centres on the so-called Al Yamamah agreement, which is now 20 years old.

Under this deal, BAE Systems supplied its Tornado jets among other items of military equipment.

The Serious Fraud Office (SFO) is investigating allegations that BAE Systems may have used slush funds to help sweeten the deal, something the company has strenuously denied.

Press reports have suggested that the Saudis may break off the Eurofighter talks if the SFO investigation continues, and buy the rival French Rafale jet instead.

The Eurofighter contract with the Saudis was announced as a "done deal" back in the summer.

It was criticised by human rights groups who questioned whether UK arms firms should continue to sell to Saudi Arabia.


SEE ALSO
Probe into BAE arms deals widens
19 Oct 06 |  Business
Saudi Arabia buys 72 Eurofighters
18 Aug 06 |  Business
Eurofighter sold to Saudi Arabia
21 Dec 05 |  Business

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