Margareta Pagano: We need clean exporters: BAE should do a deal

Serious Fraud Office is right to pursue arms company

The decision by the Serious Fraud Office to pursue BAE Systems over alleged bribes is the right one. Setting standards in the defence industry and pursuing allegations of misconduct must be the proper course for any national government. Just because the SFO couldn't bring its earlier case against BAE because Tony Blair and Lord Goldsmith decided to end the Saudi inquiry on grounds of national security – one of the biggest Blair era scandals – doesn't mean it should be allowed to escape now.

The weakest excuse from those who think the SFO wrong is that BAE was only matching all European defence contractors by paying out commissions to win contracts. This is both disingenuous and untrue as all European governments are cracking down too. It's like saying that a man who beats his wife should be let off because all his friends are doing it.

Britain agreed its own anti-bribery rules in 2001 and it has signed up to the OECD's regulations, so it is obliged to pursue allegations of bribery and should be pressing the international community to do likewise. If the Europeans don't stick to their own regulations, that's their business. But that shouldn't stop the SFO upholding principles the UK has agreed.

Equally unacceptable is the view that BAE shouldn't be touched because it is one of the UK's most successful exporters and a big employer. If the UK, with all its inventiveness, can only employ people whose business depends on bribery then we have surely hit rock bottom. The £40m Tanzanian contract was a shocking example of corruption and the people involved should be made to pay.

Yet there are good reasons why BAE should do everything it can to avoid going to court. BAE didn't take the SFO's deadline as seriously as it should, but hopefully it will now use its best artillery to square up to the SFO's Richard Alderman and do a deal. It has a month to negotiate with him, and it's got to be watertight because Alderman needs court approval to sign off on a deal.

Understandably, the last thing BAE wants is to admit guilt on certain charges. BAE promises that it is a different beast since the bad old days. Even so, it can't afford to have any admission of guilt stick because of its reputation in the US, it's biggest market. There, at the Department of Justice, the rottweilers are not only cracking down on fraud everywhere but are still investigating BAE over the Saudi affair. And they are serious: the Pentagon even closed the door on new contracts at Boeing over its procurement breaches.

That's why BAE must be seen to have clean hands and why it's lawyers are now working flat out to cobble together reduced charges with little or no admission of guilt, and pay a fine. It will be hefty but not the £1bn being touted.

There is a third way which leaves everyone's honour intact. Baroness Scotland knows that proving the case in court will be tricky. She may decide the allegations are so complex that it can't be put through. This would give both sides a way out: the SFO would have proved it has finally grown proper teeth and BAE can still just about say that there's no case to answer.

Cadbury can survive by telling one tasty truth: mergers destroy value

Dinner at Mosimann's last week with Cadbury's chairman Roger Carr, chief executive Todd Stitzer and finance director Andrew Bonfield, was a jolly affair even though the chocolate trio couldn't chat quite as freely as they might have liked in case they are clobbered by the Takeover Panel.

But they can sweet-talk investors with even more zeal now the panel has given Kraft its "put up or shut up" deadline on 9 November. Quite rightly, Carr and Stitzer continue to focus on how the proposed Kraft offer totally undervalues Cadbury, and that it's the skinny Kraft which needs fattening up by buying Cadbury.

They have now been walkabout with most of the bigger investors, persuading them that margins can be plumped up to 15 per cent by 2011. And, more importantly, that the share price at 800p won't melt if Kraft goes away. What is really interesting, if not ironic, is that 40 per cent of Cadbury's investors are American value funds. These are mainly long-term players, having bought shares at about £5 to £7as a rare "pure play", choosing Wispa over Terry's Gold.

Those I have spoken to like Cadbury's long-term upside and its big presence in overseas markets and won't sell without a stonking premium. In the West, we eat about 5kg a year of chocolate. In the emerging world, it's only a few grammes per head and is likely to keep growing.

So far, Cadbury has avoided playing the British/Quaker heritage card even though Carr has been inundated with angry letters from people all over the country appalled at the idea that Cadbury could be gobbled up by an American. Hopefully they will have persuaded investors that Cadbury has more value than Kraft's paper by the time it goes hostile.

Then maybe Carr and Stitzer can play their trump card: demonstrating that nearly all mergers/ takeovers destroy value over the long term and that protecting local communities is part of a company's fiduciary duty.

Chilling Goldman stages the stories of seven valiant women

Goldman Sachs did something unusual last week. The bank hosted a chilling documentary play about seven women who have suffered ordeals that rarely get written about, let alone acted out on stage.

Based word for word on their true stories, Seven told of a young Pakistani woman enduring gang rape in an honour crime, who has defied tradition by not committing suicide; an Afghan humanitarian aid worker forced to flee the Taliban; a Guatemalan lawyer, now a member of Congress, who fights corruption and who can't move without four bodyguards; the daughter of a former president of Nigeria whose parents were murdered by the regime; a Cambodian who has lived in exile most of her life but is now minister of women's affairs, concentrating on stopping sex trafficking; an Irish peace-maker; and a Russian who set up her country's first domestic violence hotline.

It's organised by Vital Voices, an NGO which helps more than 7,000 women around the world, and you could almost feel the shivers as hundreds of bankers watched – not just in London but also by video in Frankfurt, Paris and Moscow. Alyse Nelson, the chief executive of Vital Voices, says the play, part of the bank's diversity week, is met with astonishment wherever it shows. Nelson tells me a producer wants to take it to Broadway – but needs $3m. Goldman, you have started something wonderful, and I'm afraid you are going to have to continue to fund it. You never know, you might even make a profit.