Arrests in London in frigate affair

A Romanian woman and her British husband were arrested in London on Wednesday, for having illegally collected a commission from the sale of two British frigates to Romania, reports The Guardian on its website.

Brit Barry George, 61, and his Romanian-born wife Georgiana, 41, were arrested after the police raided their home in Chelsea, where they seized documents. George works for BAE, the largest British defence company and has acted as an agent in the sale of the two frigates to Romania.

At the centre of the Serious Fraud Office (SFO) investigation is a payment of approximately 7 million pounds sterling in “commission” made by BAE. Sources close to the Department of Trade and Industry said BAE had admitted paying commission on the deal but had refused to disclose to whom it paid the money.

Barry George is believed to have received one percent of the contract value, while a further six percent went to other unknown offshore recipients.

On Wednesday, sources in Bucharest announced that British counterparts had contacted the Romanian police in the past few weeks.

The Georges run a Romanian company, Axis Trading. Axis received income of approximately one million pounds sterling at the time of the frigate sale. Barry George, originally from Liverpool, previously ran two small Romanian import-export firms and was recorded as the BAE representative at the Romanian government conferences. The agreement for the sale of the two frigates was signed in 2003 for 116 million pounds sterling (168m euros).

The 2003 sale of the frigates was the biggest arms purchase by Romania since the fall of communism and was followed by a further lucrative contract with BAE to maintain the ships, signed while the Adrian Nastase-led government was in power.

At the time Romania was anxious to obtain British support for its bid to be allowed to join NATO and said it would use the ships to combat smuggling and other illegal traffic in the Black Sea.