BVI Offshore Business: Grey Area

The British defence company and arms manufacturer BAE Systems, which is under investigation in several countries for alleged bribery, using secret payments system and running the funds through the BVI offshore companies, paid at least £20mln to a company which is linked to a Zimbabwean arms trader close to President Robert Mugabe.  The documents reported by the Financial Times concern John Bredenkamp known for his controversial career. British properties of Bredenkamp were raided by the Serious Fraud Office almost two years ago as part of an ongoing investigation into BAE’s arms deal with Saudi Arabia, when several African National Congress officials allegedly received bribes. Currently discovered payment of at least £20m is the most significant evidence of a financial relationship between Bredenkamp and BAE.

The payments linked to Bredenkamp were made in the period between 2003 and 2005 by Red Diamond Trading, a British Virgin Islands-registered subsidiary of BAE Systems, from a London-based Lloyds TSB account. The money was transferred to another BVI company Kayswell Services, owned by Bredenkamp (he is the beneficiary of the company).

BVI company Red Diamond Trading was liquidated on May 30 last year, and now BAE’s ethical conduct and compliance with anti corruption rules are conducted. BAE, Bredenkamp and BVI company Kayswell’s representatives declined to confirm the payments or comment on what the money was for. In his turn, Bredenkamp claimed his compliance with EU arms sanctions, which ban the provision of financial related to military activities, and are in force against Zimbabwe since 2002. He also denied any involvement in the South African sale.