Private Investor: BAe bust-up is bad for Britain and bad for me

I had thought that the great BAe-Saudi Arabian slush fund scandal (alleged) was none of my business. For about a minute. Then I realised what the affair might do to my shares in Rolls-Royce, a big supplier to BAe, and a likely casualty if things get any nastier.

They held up for a while, but, in the middle of last week, they started to slump, so now they're nearer the 400p mark than the 500p that they threatened to breach a few weeks ago. Disappointing.

I'm happy to say that I bought my shares at prices well south of 200p, and even below their original float price (in 1987) of 170p, after the 9/11 atrocities pushed the whole sector into meltdown. I had faith in the form, and I was right. Now, I see our own government almost blithely threatening the future of the rest of British manufacturing. It seems strange.

Just to recap: HMG and Saudi Arabia are having a bit of a bust-up about the supposed operation of a £60m "slush fund" by BAE Systems. The possibility of any corporate naughtiness being investigated by the Serious Fraud Office has severely embarrassed the Saudis. It could cost BAe £200m in earnings, if the Saudis start to boycott our Eurofighter warplanes and the like.

It would cost me, and many other small shareholders, a few quid as well, such is the importance of the defence sector and the weight that the Saudi budget carries. It is Bad News for British industry, what's left of it. Jobs, pensions, mortgages are at stake here.

My view, as a small shareholder in Rolls-Royce, is that we shouldn't be mucking around with this. I take the Alan Clark view - not a terribly principled one, but unarguable: if we don't sell these people weapons, then the French will.

If British companies, any British companies, do operate a "slush fund" - an imprecise term if ever there was one - then I can't see what the fuss is about. After all, it might just amount to a little bit of junketing, the sort of activity that happens on a daily basis in the world of business, and, I have to say, in journalism, too.

All small-scale stuff and unlikely to influence anyone's mind. If a British business executive buys a Middle Eastern contact "lunch", is that a crime? Well, I mean, it might be a crime, but is it wrong? The way of doing business in some parts of the world, so I'm told, requires a certain amount of lubrication of wheels and generous gifts to friends and business colleagues. It is their corporate way of life, and we ought to try to fit in with it, rather than impose irrelevant alien ideas from our own econo-culture. It's a multicultural approach, if you think about it.

I cannot imagine any other government agency in the world pursuing this sort of case in the way that the Serious Fraud Office has. Other arms-exporting countries decided long ago to support their national champions no matter what, and often in defiance of all sorts of intentional treaties and EU rules on state aid. It's enough to make one purchase shares in, say, Thales (the French mob who do quite well out of British defence contracts).

Well, I'm sticking with British manufacturing and Rolls-Royce because I just hope that this mad action by the SFO will be quietly put to death. If not then perhaps we should all think about selling up and sending the money abroad.

I am pleased to report yet another rise in the share price at the JP Morgan Indian Investment Trust - up to 318p a share, last time I looked. They've grown like topsy over the past few years, and I've been a regular investor through that excellent performance, as well as through the turbulence they've occasionally suffered.

If everything they say about the future of the Indian economy is true, and given that they remain one of the few retail vehicles for investment in the Indian subcontinent, I see no reason why I shouldn't continue with my small monthly savings scheme.

Rather more riskily, my eye has been taken by a "solar wafer" manufacturer called ReneSola, based in China but quoted in London. Again, if all the futurologists are correct, then solar- panel components in China should be the epitome of a new-age share. For now, I have neither the nerve nor the funds to invest, but I'll be keeping an eye on it. It would make a good hedge for my Shell shares, at least. What do I do if the Chinese start making aero engines?

s.ogrady@independent.co.uk

PROMOTED VIDEO
Arts and Entertainment
Neil Young performs on stage at Hyde Park
musicAnd his Hyde Park set has rhyme and reason, writes Nick Hasted
News
Women have been desperate to possess dimples like Cheryl Cole's
people Cole has secretly married French boyfriend Jean-Bernard Fernandez-Versini after just three months.
Arts and Entertainment
AKB48 perform during one of their daily concerts at Tokyo’s Akihabara theatre
musicJapan's AKB48 are one of the world’s most-successful pop acts
News
Ian Thorpe has thanked his supporters after the athlete said in an interview that he is gay
people
News
The headstone of jazz great Miles Davis at Woodlawn Cemetery in New York
news
Arts and Entertainment
Brendan O'Carroll has brought out his female alter-ego Agnes Brown for Mrs Brown's Boys D'Movie
filmComedy holds its place at top of the UK box office
News
newsBear sweltering in zoo that reaches temperatures of 40 degrees
Arts and Entertainment
Professor Kathy Willis will showcase plants from the Royal Botanic Gardens at Kew
radioPlants: From Roots to Riches has been two years in the making
Extras
indybestThe tastiest creations for children’s parties this summer
Arts and Entertainment
TV The follow-up documentary that has got locals worried
Arts and Entertainment
Paolo Nutini performs at T in the Park
music
Finacial products from our partners
Property search
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Sales Executive - Central London /Home working - £20K-£40K

    £20000 - £40000 per annum: Deerfoot IT Resources Limited: Sales Executive - Ce...

    HR Advisor - 6 months FTC Wimbledon, SW London

    £35000 - £40000 per annum + Benefits: Ashdown Group: HR Advisor - 6 Months Fix...

    Information Security Manager (ISO 27001, Accreditation, ITIL)

    £70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...

    Biztalk - outstanding opportunity

    £75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...

    Day In a Page

    Super Mario crushes the Messi dream as Germany win the 2014 World Cup in Brazil

    Super Mario crushes the Messi dream

    Germany win the 2014 World Cup in Brazil
    Saharan remains may be evidence of the first race war, 13,000 years ago

    The first race war, 13,000 years ago?

    Saharan remains may be evidence of oldest large-scale armed conflict
    Scientists find early warning system for Alzheimer’s

    Scientists find early warning system for Alzheimer’s

    Researchers hope eye tests can spot ‘biomarkers’ of the disease
    Sex, controversy and schoolgirl schtick

    Meet Japan's AKB48

    Pop, sex and schoolgirl schtick make for controversial success
    In pictures: Breathtaking results of this weekend's 'supermoon'

    Weekend's 'supermoon' in pictures

    The moon appeared bigger and brighter at the weekend
    Iraq crisis: How Saudi Arabia helped Isis take over the north of the country

    How Saudi Arabia helped Isis take over northern Iraq

    A speech by an ex-MI6 boss hints at a plan going back over a decade. In some areas, being Shia is akin to being a Jew in Nazi Germany, says Patrick Cockburn
    The evolution of Andy Serkis: First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes

    The evolution of Andy Serkis

    First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes
    You thought 'Benefits Street' was controversial: Follow-up documentary 'Immigrant Street' has got locals worried

    You thought 'Benefits Street' was controversial...

    Follow-up documentary 'Immigrant Street' has got locals worried
    Refugee children from Central America let down by Washington's high ideals

    Refugee children let down by Washington's high ideals

    Democrats and Republicans refuse to set aside their differences to cope with the influx of desperate Central Americas, says Rupert Cornwell
    Children's books are too white, says Laureate

    Children's books are too white, says Laureate

    Malorie Blackman appeals for a better ethnic mix of authors and characters and the illustrator Quentin Blake comes to the rescue
    Blackest is the new black: Scientists have developed a material so dark that you can't see it...

    Blackest is the new black

    Scientists have developed a material so dark that you can't see it...
    Matthew Barzun: America's diplomatic dude

    Matthew Barzun: America's diplomatic dude

    The US Ambassador to London holds 'jeans and beer' gigs at his official residence – it's all part of the job, he tells Chris Green
    Meet the Quantified Selfers: From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor

    Meet the 'Quantified Selfers'

    From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor
    Madani Younis: Five-star reviews are just the opening act for British theatre's first non-white artistic director

    Five-star reviews are just the opening act for British theatre's first non-white artistic director

    Madani Younis wants the neighbourhood to follow his work as closely as his audiences do
    Mrs Brown and her boys: are they having a laugh?

    Mrs Brown and her boys: are they having a laugh?

    When it comes to national stereotyping, the Irish – among others – know it can pay to play up to outsiders' expectations, says DJ Taylor