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Last Updated: Thursday, 22 July, 2004, 11:53 GMT 12:53 UK
Firm's Iraq contracts discrepancy
Iraqi women buying grain
The Weir Group found discrepancies in its oil-for-food programme role
An investigation into a Glasgow-based engineering company's work for the UN oil-for-food programme in Iraq has found financial irregularities.

The Weir Group said more than 4m was paid on top of normal commission and it does not know who received the money.

It had previously denied it struck illegal deals with Saddam Hussein's regime to win work in Iraq.

An internal review found that higher than normal payments were made and the company has apologised.

Weir Group is one of a number of companies hoping to get a slice of the 1bn Iraqi re-building programme.

The board considered it essential that we make public the current information
Sir Robert Smith
Weir Group chairman
Following its investigation, it said that 15 out of the 37 contracts, for water treatment equipment, had been raised in price by 4.2m.

It found that payments were made to an agent, in addition to sales commission.

Chairman, Sir Robert Smith, said: "It is most regrettable that previous statements, whilst made in good faith, were incorrect. The problem dates back to 2000.

"We undertook a thorough review of these contracts and although the investigation has not yet concluded the board considered it essential that we make public the current information."

Sanctions imposed

Shares in Weir, which employs about 8,000 people worldwide, fell more than 3% following the announcement.

But the company said the new information would not alter its outlook in 2004, which includes a pick-up in orders in the final six months.

Weir, which has former Nato Secretary-General Lord Robertson on its board, was granted 37 contracts as part of the programme through its overseas business, Wesco Dubai.

The company's profits totalled 56.7m last year.

Following Iraq's invasion of Kuwait in 1990, the UN Security Council imposed sanctions prohibiting trade with Iraq.

The oil-for-food programme was then introduced to enable exports of Iraqi oil to take place provided the cash was used for food and medicine.


SEE ALSO:
Iraq oil-for-food probe spreads
21 Jun 04  |  Business
Annan seeks Iraq 'fraud' inquiry
20 Mar 04  |  Middle East
Trading Iraq's unpaid debts
22 Jan 04  |  Business


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