Files Formal Complaint Against Airbus Parent
Allegations of insider trading at European Aeronautic Defense
and Space (EADS,) over a six month period starting in November
2005, refuse to go away... and on Tuesday, the French financial
market regulator filed a formal complaint against the aerospace
consortium.
According to The New York Times, the Autorité des
Marchés Financiers also demanded any and all evidence
gathered during the regulatory agency's subsequent 18-month
investigation be sent immediately to prosecutors in Paris, to be
considered for possible use in a criminal trial.
As ANN reported, former EADS
co-CEO Noel Forgeard and Airbus CEO Gustav Humbert resigned in July
2006, in the shadows of allegations of collusion by managers at the
company to commit insider trading.
Forgeard and other EADS executives -- including current Airbus
chief Thomas Enders -- are under investigation for dumping their
company stock back in March 2006, two months before public talk of
a second delay in the A380 program surfaced. Formal charges of
insider trading were not established at that time, but both the
German and French governments found it curious the executives got
out at just the right time, and made money... while most other EADS
investors rode the wreckage down.
Shares in EADS rose slightly Tuesday on the news of the
investigation, a signal shareholders are eager to see the issue put
behind EADS as quickly as possible. But prices are still down 35
percent over the past year... and more fallout could loom.
In related news, current EADS CEO
Louis Gallois -- who was brought in to replace Forgeard -- stressed
Tuesday all EADS managers implicated in the investigation, past and
present, should be presumed innocent until proven otherwise.
"EADS will support its managers in their defense," Gallois said
in a prepared statement. "It intends to demonstrate that it has
applied standards of excellence when communicating to the market
and has acted with full transparency."
News of the regulator's pursuit of justice comes as EADS
planemaker Airbus is in the midst of its massive Power8
restructuring effort, and as the consortium grapples with the
weakening US dollar against the Euro.
In better news, a partnership between EADS and Northrop Grumman
recently beat out American planemaker Boeing for the US Air Force
KC-X tanker contract... but even that decision is far from final,
as Boeing and its supporters within the US government have mounted
a loud protest of the ruling. Ongoing talk of unscrupulous business
dealings at EADS will only fuel that fury.
"It is not going to do EADS and Airbus credibility any good at
all that the prosecution issue has been raised against the same
senior management that is responsible for delivering the US Air
Force tanker program," analyst Doug McVitie told the NYT. "This is
very bad publicity at a very bad time."