Scotland Yard in Rock fraud inquiry

DETECTIVES from Scotland Yard are investigating allegations that bribes were paid to a senior member of the Gibraltar government in return for lucrative building contracts.

The arrival of senior British police officers on the Rock will add to the current tensions in Anglo-Gibraltarian relations over the colony's future.

The Governor of Gibraltar, Field Marshal Sir John Chapple, officially requested Scotland Yard for assistance in investigating bribery and fraud claims.

Detective Chief Inspector Peter Connor, head of the Metropolitan Police public sector corruption unit, was in Gibraltar last week. He is understood to be investigating links between companies involving a senior Gibraltar minister.

The companies were concerned in a multi-million- pound property development on the Rock.

A Danish firm, Baltica, called in police last year after discovering financial irregularities in a pounds 40m flat complex called Euro Towers. Danish police have charged a former Baltica director and four other men.

Baltica has told officials of the London Stock Exchange, where it is listed, that 'investigations which the group has made after suspicion was aroused seem to show that not insignificant amounts had been paid to companies or persons outside the group. There is no immediate indication that these companies and persons have supplied services which match the amounts paid.'

Baltica has since sold off its troubled Gibraltar projects to another Danish company, Gefion.

The company with which the minister is reportedly linked opened accounts into which large sums of cash were allegedly paid to secure building contracts in Gibraltar.

'Officers have travelled to Gibraltar and inquiries are continuing,' a Scotland Yard spokeswoman said yesterday.

The shadow cast by the investigation will not help Gibraltar's attempts to present itself as a credible and important offshore financial centre.

Joe Bossano, the Chief Minister, who has been blocking closer Anglo-Spanish co-operation over the colony's future, hinted recently that he would like Gibraltar to be independent.

There is no provision in the 1713 Treaty of Utrecht for independence. If Britain were to abandon Gibraltar - which it could do only with the consent of the Gibraltarians - it would automatically revert to Spain, an outcome which is opposed by the Gibraltar government.

Spain and Britain agreed in 1984 to negotiate the future of the Rock but have made little progress.

Tension over Gibraltar's status was further underlined yesterday after George Bush, the former US President, called on Mr Bossano and Sir John Chapple during a private visit to Spain. La Vanguardia reported yesterday that Spanish diplomats thought Mr Bush had been 'very badly advised' to make the calls in view of Spanish claims to the colony.