Airbus insider trading trial opens in Paris
Alleged that executives knew of A350 issues
• A long-awaited French corporate trial involving allegations of insider trading in the shares of Airbus Group NV got under way on Friday, marking the climax of an eight-year investigation.
Seven current and former managers at Europe’s largest aerospace group, and two former industrial shareholders, are accused of trying to profit from inside knowledge of problems with two jet developments and a deteriorating financial outlook when they sold shares in what was then EADS in 2006.
All deny the charges and argue that the trial should not be taking place because they have already been cleared by the French stock market regulator, highlighting a growing European debate about “double jeopardy” rules.
However, a French court was expected to reject an attempt to have the trial halted on the grounds that it went against a recent ruling by the European Court of Human Rights.
Current managers facing trial include John Leahy, the sales chief of planemaking subsidiary Airbus, who was not present on the opening day but is expected to give evidence next week.
Alain Flourens, who heads the planemaker’s A380 program, and Andreas Sperl, formerly the Airbus finance director and now chief executive of a subsidiary that turns jetliners into cargo planes, are also facing trial.
Former managers on trial include Noel Forgeard, the former co-chief executive of EADS and once an advisor to former French president Jacques Chirac.
“Not virtually cleared, totally cleared,” Mr. Forgeard said on his way into the court, correcting a journalist who asked about the 2009 ruling by the AMF stock market regulator.
French media group Lagardere and German car firm Daimler AG, which reduced their stakes in EADS shortly after the individual transactions, were also represented.
The three-week Paris trial will take place without a jury in front of a panel of judges in an ornate wood-panelled chamber best known as a place for auctioning off seized property or as the scene of previous high-profile corporate trials.
Legal experts say a verdict is likely to be given weeks or months after the trial closes and that the appeals process, in the case of convictions, can take years.
The trial will offer a rare glimpse of the inner workings and decision making of one of Europe’s most strategic industrial companies and is expected to revive memories of Franco-German in-fighting and strategy disputes its leaders want to forget.
Airbus Group has reshaped itself in recent years by reducing the role of the French and German governments and is basking in record demand for its passenger jets, but has often been an unpredictable lightning rod for disputes outside the group.
As the trial got under way, Airbus Group chief executive Tom Enders wrote to its 100,000 employees, saying “I am confident that, once again, it will be demonstrated that these accusations are groundless and should be fully dismissed.”
Prosecutors argue that executives knew the full extent of industrial problems on the A380 and the likelihood of a costly redesign of the A350 when they sold shares up to March 2006. The announcement of worsening delays on the A380 and a large profit warning wiped 26% from the EADS stock price on June 13, 2006, erasing 5.5-billion of market value.