SFO urged to step in over Leonardo claims
ARMY helicopter maker Leonardo faces mounting pressure over bribery allegations amid fresh calls for British authorities to open a criminal inquiry.
The watchdog group Corruption Watch examined Leonardo’s allegedly corrupt international sales of helicopters and has called on the Serious Fraud Office to launch a formal inquiry.
Formerly known as Finmeccanica, Leonardo has major UK operations, which include the construction of Agustawestland helicopters in Yeovil.
Corruption Watch examined court evidence relating to the sale of helicopters to South Korea and India.
The sale of Wildcats to South Korea in 2013 triggered legal cases, which heard evidence that Leonardo used middlemen to influence the sale.
This allegedly included a promise to ex-defence minister Yang Kim of £15,000 a month to “mediate” with officials and a 0.5pc “success fee” on the £230m contract. It is illegal in South Korea to accept payment to try to influence government officials. Kim was convicted of accepting a bribe.
Corruption Watch claims the pressure on Kim came despite the company having set up a committee to investigate its compliance on bribery rules.
The 2010 deal to supply 12 Merlin helicopters to India is also under the microscope. Investigations in India and Italy found the helicopters were picked despite not being able to fly high enough to work in India’s mountains. The sale was cancelled in 2014 when India gave Leonardo a chance to say why it should not be axed. Corruption Watch claims this meant middlemen had been used.
Two Leonardo executives faced charges of bribery in Italy with claims they paid €51m (£45m) to middlemen to win the deal. Initially they were found guilty, but were cleared on appeal. Leonardo itself was treated separately. It paid almost €8m to settle the case without admission of wrongdoing, the bulk coming from its UK arm.
The claims will ramp up pressure on UK regulators to subject Leonardo to greater scrutiny. Paul Holden, Corruption Watch investigations director, said: “There’s been a perplexing lack of any formal investigations in the UK.”
Leonardo said due diligence on Kim did not reveal any risks and he was suspended when charged. The company added it had not been charged with any offence in South Korea.
On the Indian deal, Leonardo said it did not comment on ongoing cases, but proceedings related to the deal have “not resulted in Leonardo, nor any of its employees past or present, being convicted on grounds of corruption”.
The SFO said it “could neither confirm nor deny whether we are investigating”.
The MOD said: “This is a matter for the appropriate authorities.”
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