France’s stock-market watchdog, the Autorité des Marchés Financiers (AMF), is set to begin hearings Monday for those suspected to have been involved with insider-trading at the Franco-German aerospace giant European Aerospace Defense and Space (EADS). The company is accused of misleading investors by concealing information of delays to its A380 project.
AMF is investigating whether top executives and certain shareholders at EADS were aware of delays to the Airbus A380 project and if they exercised stock options before a formal announcement was made in June 2006. Once the problems with the A380 became public on June 13, 2006, EADS shares plummeted by almost 26 percent in a single day.
Those named face fines of up to five million euros if found guilty in a scandal that is proving a major embarrassment to the aerospace giant.
In all, 17 individuals - including former and current top executives and founding shareholders French media group Lagardère SCA and German automaker Daimler AG- are implicated in the scandal. All parties have denied the insider-trading charge and EADS has put forth that it provided investors with accurate and timely information.
Along with EADS co-chairman Noël Forgeard, the executives named are US-born Airbus commercial director John Leahy, former Airbus finance director Andreas Sperl, former EADS managing director Jean-Paul Gut, former Airbus vice president Olivier Andriès, former Airbus human resources director Erik Pillet and Airbus Centres of Excellence chief Alain Flourens.
All the defendants, with their entourages of lawyers and translators, gathered at the Palais Brongniart in central Paris for the hearing. The former stock exchange venue has been transformed into a temporary court specifically for the occasion.
For AMF, the case represents one of the biggest and most challenging investigations it has ever undertaken since its creation in 2003.