BAE in £450m Hawk deal as probe widens

BAE Systems was awarded a £450m contract yesterday to supply Hawk trainer aircraft to the Ministry of Defence, helping secure thousands of jobs at factories in the North-west and Humberside.

The MoD is buying 28 Hawks, which will be used to train Royal Air Force and Royal Navy pilots to fly the next generation of advanced combat aircraft such as the Eurofighter Typhoon and F-35 Joint Strike Fighter.

The deal came as it emerged that the Serious Fraud Office investigation into alleged corruption involving BAE arms contracts has been extended to the sale of 28 Hawk aircraft to South Africa in 2001. Earlier this week, SFO officials and MoD police raided the UK home and offices of a Zimbabwean arms broker who is said to be BAE's agent in southern Africa.

John Bredenkamp, a South African-born farmer and rugby player with links to the Mugabe regime, is thought to have been out of the country at the time of the raid on his company, Breco Services, in Ascot.

The SFO confirmed that the raids were part of its ongoing investigation into alleged corruption in connection with BAE arms sales but declined to give any more details. Mr Bredenkamp is understood to have denied that he played any role in the Hawk deal with South Africa, which was supported by the UK government with the aid of loan guarantees from its export credit agency.

The BAE investigation began in 2004 and was initially confined to claims that two companies linked to BAE had used a £60m slush fund to bribe Saudi officials involved in the £20bn Al Yamamah arms-for-oil deal. It was then extended to the payment of £1m to the former Chilean leader General Augusto Pinochet and suspected corruption involving the sale of second-hand Royal Navy frigates to Romania.

BAE said it could not make any comment on the latest twist in the SFO inquiry as the investigation was still going on. A number of BAE executives have been interviewed by the SFO in connection with the inquiry.

BAE has sold more than 900 Hawks around the world, including a number to Indonesia, which has been accused of using the aircraft to suppress internal unrest. The Hawk programme supports 1,600 jobs at BAE's Brough plant on Humberside and Warton facility near Manchester and thousands more jobs in supply firms. The MoD order is the first since its original purchase of 176 Hawks in the late 1970s.