UPDATE 1-Sweden eyes Saab in probe over BAE Czech deal

...

STOCKHOLM/Swedish corruption prosecutors have contacted Saab over its dealings in the Czech Republic with British defence firm BAE Systems , Saab said on Tuesday.

The Swedish aerospace and defence firm denied any wrongdoing and said it would cooperate fully with Sweden's chief corruption prosecutor, Christer van der Kwast. BAE owns a 20 percent stake in Saab.

"We have done nothing illegal," Saab spokeswoman Helena Stalnert said. "We have a set of internal rules regarding how we do business, and we of course adhere to existing legislation and international rules in this area."

The preliminary inquiry by Swedish prosecutors was triggered by criticism set to be aired on Swedish public television later on Tuesday, Saab's Stalnert said.

Swedish public service television said on its Web site it would air its investigation into behind-the-scenes dealings when BAE-Saab won a tender to sell 24 new Gripen jets to the Czech military in 2002.

The Czech government later cancelled the deal after heavy floods forced it to change its spending plans. The Swedish prosecutor's office said van der Kwast would not comment on his investigation until after the programme had aired.

The Financial Times reported that the probe concerned bribery and widened an ongoing investigation by Britain's Serious Fraud Office into corruption claims against BAE.

The British company denies all wrongdoing. "The main issue here concerns BAE Systems, but seeing as Saab is connected to BAE, the problem is if bribes have been paid, whether Saab took any part in it," van der Kwast was quoted as saying.

The FT cited the prosecutor as saying he was conducting preliminary work on Saab's involvement in the Czech deal and would soon decide whether to launch a full inquiry.

The Swedish probe was not been carried out independently, he added, while declining to disclose the other parties involved.

John Neilson, BAE's director of group media relations, reiterated the company's stance that it continued to cooperate fully with the inquiry by the UK's Serious Fraud Office.

"The continued reporting of allegations against us represents an attack on the reputation of our company and individuals. The company continues to reject the allegations being made," Neilson said in an e-mailed statement.

"BAE Systems is committed to meeting the highest ethical standards in its dealings with others. We have very strong policies and processes in place, which are clearly communicated to our employees and our advisors," he added.

"These policies are subject to a robust assurance process. We accept no compromise of our values." Neilson said the firm was also committed to complying with all anti-corruption laws.

[LONDON/Reuters/Finance.cz]