Company and bosses cleared of insider trading and market abuse allegations.
EADS cleared after inquiry
PARIS // Airbus parent EADS won a firm victory when regulators cleared the company and current and former bosses of insider trading and market abuse, ending a three-year investigation that had cast a pall over the group. The investigation was triggered after EADS (European Aeronautic Defence and Space) saw a 26 per cent fall in its share price in June 2006 after a profit warning and the announcement of worsening delays in deliveries of its A380 superjumbo.
France's financial markets regulator, the AMF, said on Thursday that it had found no evidence that 17 people who exercised share options in the weeks and months beforehand knew about the problems threatening Europe's largest industrial project when they sold shares. Those cleared include the current Airbus chief executive, Tom Enders, and the former co-chief executive of EADS, Noel Forgeard, who resigned shortly after the share plunge and later faced a political storm over the size of his pay-off.
Mr Forgeard and four others still face a criminal inquiry but are likely to receive encouragement from the AMF's final report. The watchdog also formally cleared the company's core industrial shareholders, the German car maker Daimler and French media group Lagardère, both of which sold 7.5 per cent stakes in EADS in April 2006. John Leahy, the Airbus sales chief, was also cleared in the AMF report. Mr Leahy, an American, had vehemently denied insider trading, as did all the other suspects. Several had also protested about leaks linking them to the AMF probe.
EADS was cleared of misleading financial markets over the extent of delays to the A380, the world's largest airliner. It welcomed the AMF's decision and said it was confident it would be cleared in other proceedings related to the case, but declined further comment. The relief inside the Franco-German-led group triggered by the AMF decision was evident, however. "We didn't expect to get as much as this," a lawyer close to the aerospace group said.
The largest ever case tackled by the AMF had been seen as a test of its muscle and had triggered a high-stakes battle between the regulator and one of Europe's largest companies. The move does not yet move EADS out of the legal woods but eases an issue that had forced the company to remain more inwardly focused than it would have liked, after moving to try to heal internal splits and simplify its management last year.