BAe faces arms protest

Anti-Arms trade campaigners are planning to pack British Aerospace's annual general meeting on Wednesday to protest against the company's sale of military equipment to "brutal regimes" such as Saudi Arabia and Indonesia.

About 100 shareholders, each owning one company share and led by Labour MP George Galloway, will quiz BAe directors about the company's alleged involvement in the sale of electric shock batons and the policy of its subsidiary Royal Ordnance towards the manufacture of anti-personnel land mines, which the British Government said last week it wanted to see banned worldwide.

The protesters are also de- manding that BAe stops selling Hawk aircraft to Indonesia. The first of 24 jets are due for delivery next month.

But the most controversial topic raised is likely to be BAe's role in the treatment of Mohammed Al-Masari, the Saudi dissident at the centre of a diplomatic row between Britain and Saudi Arabia. Dr Al-Masari has been allowed to stay in the UK for four years after a deportation plan was withdrawn.

"British Aerospace cannot escape responsibility for the plight of refugees fleeing from regimes that the company has chosen to support through military sales," said Will McMahon of the Campaign Against Arms Trade.

BAe, Britain's biggest arms manufacturer, is heavily involved with the Saudi government through the massive Al-Yamamah arms deal, worth about pounds 2bn a year.

But the company has denied claims by anti-arms trade activists that it has joined in calls to have Dr Al-Masari deported to protect existing contracts. "Clearly, we would like our business with Saudi Arabia to continue but we do not believe it is appropriate to become involved in a political issue," a spokesman said.

Last week, Babcock International warned that worsening Anglo-Saudi relations had cost it $220m (pounds 147m) in lost engineering orders in the last six months. The news hit shares in many companies dealing with Saudi Arabia, including BAe.

Separately, BAe last week backed down on controversial plans to reform voting rules at the AGM after coming under pressure from Pirc, the corporate governance consultancy. BAe has agreed to reinstate an annual vote by shareholders on its report and accounts and to publish any substantial amendments to its resolutions ahead of the meeting. Shareholders will also be able to propose minor amendments at the AGM.