SFO swoop on boatyards links Saudi prince to BAE slush fund

Prince Turki bin Nasser, until recently the deputy head of the Saudi airforce, has been linked to the series of police raids last week in the UK over the alleged £60m slush fund run by BAE Systems. The Serious Fraud Office (SFO) arrested two British men and raided eight different locations on Wednesday.

Prince Turki bin Nasser, until recently the deputy head of the Saudi airforce, has been linked to the series of police raids last week in the UK over the alleged £60m slush fund run by BAE Systems. The Serious Fraud Office (SFO) arrested two British men and raided eight different locations on Wednesday.

The police raids included two boatyards on the South Coast, where luxury yachts are moored and maintained, paid for by BAE.

It is alleged that a slush fund was administered through two travel companies working for BAE and operated for more than 14 years. It channelled £17m to Prince Turki and his family in the form of top marque cars, holidays and shopping gifts. Prince Turki, the son-in-law of the Saudi defence minister, was in charge of some £50bn worth of Saudi Arabia's defence orders, directed through BAE, over the last two decades.

The SFO said last week that it had "commenced an investigation into suspected false accounting in relation to contracts" involving BAE and the travel companies Robert Lee International and Travellers World.

Documents in the case show that two yachts have been paid for under Prince Turki's name within the slush fund.

But the prime user of the boats has been Wing-Commander Tony Winship, BAE's former customer relations executive, who was one of the two men arrested and questioned on Wednesday. The other man arrested was a businessman, John Sharp.

Ministry of Defence Police, acting for the SFO, raided the Berthon boatyard near Mr Winship's home in Lymington, Hampshire, where the luxury Faye Samantha is moored. The £80,000 yacht was purchased through the slush fund for the use of Prince Turki.

A solicitor's letter in 1993 to Mr Winship says: "You have instructed me that the purpose of the transaction is that British Aerospace charter the boat for Mr Nasser." The yacht is registered in Mr Winship's name.

Also raided was Lallow's boatyard near Cowes, on the Isle of Wight. The 40ft Serafina is registered at the marina. Slush fund documents show this as a facility for Prince Turki. But it is owned by Mr Winship.

Neither Berthon nor Lallow's boatyard is a target of the investigation.

BAE shares dropped in price after the raids. A jittery BAE put out a press release saying that claims BAE Systems is under investigation are wrong. However, the SFO has pointedly not endorsed this comment.