European aerospace giant EADS was told five years ago about suspect payments and costly gifts made by a British subsidiary facing a criminal investigation, the Financial Times reported on Tuesday.

The alleged revelation comes after Britain's Serious Fraud Office last week said it had launched a criminal probe into the activities of the British unit in Saudi Arabia.

According to the FT, the European Aeronautic Defence and Space Company (EADS) was informed in 2007 about costly gifts given to Saudi Arabian royalty and military, as well as suspect payments made to Cayman Island bank accounts.

The newspaper, citing email correspondence, said Mike Paterson, financial controller of EADS division GPT Special Project Management, had alerted his bosses about the activities.

The FT reported that Paterson had contacted GPT's managing director and the chief executive of GPT parent Paradigm, part of EADS' space division, about unexplained payments to two Cayman Island accounts totalling �11.5 million ($18.0 million, 14.6 million euros) between 2007 and 2008.

Paterson also reportedly questioned the gift of four cars to Saudi royalty and military, as well as a �278,00 rental payment for a villa owned by a Saudi National Guard general.

An EADS spokesman declined to comment on story.

GPT was a local subsidiary of EADS that worked exclusively for Britain's Ministry of Defence.