EADS declines comment on potential fines

Airbus parent EADS declined to comment today on media reports that a senior executive at the plane maker could face a possible fine in a French probe into suspected insider trading.
Several newspapers reported that Airbus sales director John Leahy could have to pay a fine of about €3.6 million ($5.10 million) if provisional recommendations of French stock market regulator AMF are upheld later this year.
Leahy, the American-born sales executive who is credited with pushing Airbus ahead of Boeing in sales in recent years, has denied any wrongdoing, as have others involved in the inquiry.
An Airbus spokesman declined to comment on Leahy’s position.
The AMF is investigating whether executives and key shareholders knew of worsening delays to the A380 superjumbo when they sold shares in 2005 and 2006.
The delays caused a slump in EADS shares when they became public in June 2006.
The AMF is also examining the financial communications carried out by EADS as a company during the same period.
The reports said that EADS faced a recommended fine of €700,000 over alleged abuses of market transparency.
The recommendations have not been published.
A spokesman for EADS declined to add to a company statement on Tuesday which said it had received a copy of the report.
“EADS will continue to defend itself and will demonstrate the validity of all its arguments including those not yet addressed by the report; the company will also continue to bring its support for the defence of the individuals concerned,” it said.
The AMF was not immediately available to comment.
The papers said Leahy was one of two current executives on a list of seven people targeted by the AMF, which includes former EADS co-CEO Noel Forgeard who is no longer with the company.
Forgeard is also under investigation in a separate criminal probe. He has denied insider trading and pledged to clear his name. He was forced to resign in 2006 over the A380 delays.
The reports said Forgeard faced a fine of €5.5 million, if the recommendations are upheld.
He and others still being investigated by the AMF will have a chance to defend themselves in November, with a final decision on whether to impose any regulatory fines expected at end-year.
In an earlier leaked draft report, the AMF had said it was investigating 17 individuals as well as the core industrial shareholders of EADS, French media firm Lagardere) and German car firm Daimler.
Both said they had now been cleared by the AMF, sending shares in Lagardere higher yesterday.
A lawyer with access to the file told Reuters the AMF had provisionally concluded seven people had dealt shares while in possession of confidential information including Forgeard.
The lawyer said serving Airbus Chief Executive Tom Enders, who last year dubbed the probe, a “show trial”, had been cleared.
An AMF spokesperson said that conclusions of the AMF’s preliminary report were communicated to those involved.
EADS shares rose 2 % on a spate of broker upgrades today, a day after it stuck to revenue and delivery forecasts and sounded a more optimistic note on the rate at which it burns cash during an aviation crisis.

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