BAE unit in $30 mln settlement over body armor

Tue Oct 7, 2008 4:32pm BST

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WASHINGTON (Reuters) - The Armor Holdings unit of BAE Systems (BAES.L) has agreed to pay $30 million (17.1 million pounds) to resolve charges that it knowingly made and sold defective bullet-proof vests used by U.S. police and emergency workers, the Justice Department said on Tuesday.

The department had charged that Armor Holdings made and sold Zylon vests despite having information that the materials degraded quickly and were unsuitable for ballistics use.

The settlement is part of a larger probe into the use of Zylon materials in body armour. The United Sates last June sued Zylon's maker, Honeywell (HON.N), for sales of its Zylon product Z Shield to Armor Holdings.

(Reporting by Randall Mikkelsen, editing by Jackie Frank)

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