‘Insider trading’ problem for Airbus

Source: Manufacturing Digital

Date :04/10/2007 10:27:20

Allegations made towards parent company EADS have come less than two weeks before a glitzy ceremony marking the delivery of the first superjumbo to Singapore Airlines.

The preliminary report by the stock market regulator suggests that EADS executives sold shares and exercised stock options after learning about significant delays to the A380.

EADS Chief Executive Louis Gallois, who did not sell shares at the time, tried to downplay the findings, which judicial officials said Wednesday had been delivered to the prosecutor's office.

‘Distraction’

Gallois said his job is to ensure that managers aren't distracted by the negative publicity and get on with the job of competing with U.S. rival Boeing Co. and selling planes.

"We are entering the period of convalescence," he said Wednesday during a debate on relations behind the Franco-German consortium that runs European Aeronautic Defense & Space Co. NV. "I would prefer that they talked about us for other subjects ... but it is not me who makes the news."

EADS said in a statement it is "most surprised" by the leaked reports, which it considers "an unlawful violation of the confidentiality of the current investigations and of the principle of the presumption of innocence."

‘Setbacks’

The Financial Markets Authority, or AMF, has been investigating for more than a year how much executives and board members knew about profit-damaging delays to the A380 superjumbo when they sold shares or exercised stock options worth several million Euros between November 2005 and March 2006.

French daily Le Figaro, which claimed to have seen the AMF's preliminary report, said the problems linked to the A380 and the mid-range A350 were raised in an EADS board meeting as early as July 2005.

EADS shares reacted calmly to the AMF move after more than a year of speculation about insider trading. They fell 0.7 percent to close at 21.71 euros ($30.78) — still far below their level above 30 euros at the time of the stock sales in 2005 and 2006.

October 4, 2007

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