Thursday, May 19, 2011

Saab Looking At Bribe Allegation In Fighter-Jet Deal

STOCKHOLM -(Dow Jones)- Saab AB (SAAB-B.SK) Wednesday said it would examine the circumstances surrounding the award of a contract by a subsidiary and linked to the sale of Gripen fighter jets to South African following a report by Swedish media that suggested the defense and aerospace company paid money to a government adviser to finalize the deal.

"Saab was not previously aware of the contract that has now been made public," the company said in a statement, adding that previous probes had found no evidence of irregularities.

The latest development centers on the disclosure by Swedish news channel TV4 of a purported contract from 2003 between Sanip, a company owned by Saab, and Fana Hlongwane of Hlongwane Consulting Ltd., adviser to the South African minister of defense at that time.

The apparent contract details alleged payments to ensure the South African government didn't terminate the Gripen deal. Bank records show that Sanip paid Hlongwane about 50 million Swedish kronor ($7.9 million) in 19 installments between 2003 and 2005, TV4 reported.

A spokesman for Hlongwane couldn't be reached for comment and a spokesman for the South African government declined to comment.

Saab said it was "looking very seriously at the accusations now being made" and will make "further enquiries to investigate the circumstances regarding the contract in question."

"Saab has a zero-tolerance policy with regard to bribery and corruption, and the company focuses heavily and works continuously to improve the regulations for dealing with marketing consultants to avoid all possible risk of suspicion," it said.

Saab's sale of 26 Jas Gripen fighters to South Africa in 1999 and the cooperation with shareholder BAE Systems PLC (BA.LN) has been subject to several investigations in Sweden, South Africa and the U.K., but none has resulted in findings of wrongdoing.

The new information regarding the South African deal comes a time when Saab's chief executive, Hakan Buskhe, is in Brazil to market the Swedish jet fighter to the Brazilian government.

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