By Amy Wilson and Jonathan Russell The Telegraph 15, May 2011 BAE Systems, Britain's biggest defence company, has set up an internal panel to allocate the £29.5m it agreed to donate to Tanzania as part of its settlement with the Serious Fraud Office (SFO). Nearly six months after the approval by the High Court of the company's settlement with the SFO regarding the sale of a radar to Tanzania, BAE has revealed how it will spend the money. The British Government was understood to have been keen for BAE to give the money directly to the Government of Tanzania. However, the company has created a six-person panel to decide how it should be spent. The payment was part of a deal reached in February 2010 to settle a long-running bribery and corruption investigation by the SFO, in which investigators dropped their prosecution and agreed a £30m settlement with BAE for failure to keep proper accounting records over the sale of the radar. BAE had failed to account properly for $12m (£7.4m) of payments made to a former marketing adviser. At the same time, BAE admitted to "defrauding the US" over the sale of fighter planes to Saudi Arabia and Eastern Europe and paid a $400m fine to the Department of Justice. After paying a small portion of the fine to the UK courts, the defence company was left with £29.5m to give to the people of Tanzania, which BAE intends to distribute through charities rather than the Tanzanian government. The SFO entrusted the process to BAE. Richard Alderman, director of the SFO, said: "Returning money to the people of Tanzania was at the heart of the agreement I negotiated with BAE and I am pleased that the process has begun." A BAE spokesman said the company's charitable giving policy directs it to give money to veterans' and armed forces charities and organisations involved with education and skills. As a result, giving the money to the government would not be appropriate, it said. However, the Foreign Office was understood to have been keen for payment to be made directly to the Tanzanian government. BAE is setting up an advisory board of three members of staff and the same number of external advisers, who will come from a "non-corporate" background and have experience working in Africa. The board does not have a timetable for distributing the money, which has been put into an interest-bearing account separate from BAE's own accounts, but a spokesman said the company has already been inundated with requests from charities in the country, and stressed that the process will not be rushed.