BAE's new chief King pledges to repair defence firm's reputation

BAE Systems insider Ian King yesterday won an eight-month race to succeed Mike Turner as chief executive of the com-pany and immediately pledged to restore the defence giant's reputation.

Mr King, who won the top job ahead of several external candidates considered by BAE's board, said he would implement in full the recommendations made by Lord Woolf, who published a report into the company's ethical standards earlier this year.

"We are all up for making these changes," Mr King said. "The big issue for us is reputation and we are raising that bar very high."

Dick Olver, BAE's chairman, who took the final decision to promote Mr King from his current job as chief operating officer, said: "What we are going to see is BAE becoming the most international defence company in the world and we should also be the most ethically responsible."

However, BAE faces a battle to rescue its reputation. The company has been dogged by allegations that it paid bribes as part of a 43bn arms deal arranged between the British government and Saudi Arabia in the 1980s. BAE has repeatedly denied any wrongdoing.

In the UK, the Serious Fraud Office controversially abandoned an investigation of the affair after the intervention of the then prime minister Tony Blair, though it may have to reconsider this decision following a legal ruling in favour of anti-arms campaigners who claim the dropping of the probe was illegal.

BAE's dealings with Saudi are also being investigated by the US Department of Justice, which has led to a series of subpoenas being issued to several senior executives. Several directors, including Mr Turner, have been briefly detained by investigators while on business in the US.

Mr King has the additional task of managing BAE's businesses across its six "home markets" of the UK, US, Australia, Saudi Arabia, South Africa and Sweden. Mr Olver said one factor in Mr King's appointment had been his "front and centre" involvement in a series of acquisitions that has seen BAE expand internationally, including the A$775m (370m) purchase of Australian defence contractor Tenix Defence, which was completed yesterday.

He will take up his new role in September, when Mr Turner steps down.

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