Airbus parent EADS threw its backing behind Airbus sales chief John Leahy and other current or former executives caught up in a long-running insider trading investigation, saying it was sure they would be cleared.
Leahy and a total of six others have been placed under formal investigation as French judges probe allegations that they knew about worsening delays to the A380 superjumbo when they sold shares in 2006.
An announcement in June that year of serious problems on the world’s largest airliner caused EADS shares to dive 26 percent. Leahy, who has denied any wrongdoing, was cleared along with other executives and shareholders in a separate investigation into the case by France’s AMF stock market watchdog a year ago, Reuters reports.
“The present and past executives concerned have already proven their innocence once before the AMF Sanctions Commission. EADS is convinced that they will be proven innocent once again,” the company said in an emailed statement on Saturday.
Being placed under formal investigation in France is a step short of formal charges, but may lead to trial.
Leahy is the most high-profile serving executive facing investigation after judges cleared people who had sold shares in an earlier stock option window, including Airbus Chief Executive Tom Enders, or those who were not linked directly to Airbus at the time, such as CEO-in-waiting Fabrice Bregier.
Sources close to the aerospace company said they were confident that Leahy and others would be cleared because they had emerged unscathed through the parallel AMF process, in which it would have been easier to make the accusations stick.
For criminal charges to be brought and upheld in court, prosecutors must prove an intent to commit a crime whereas the AMF had to show suspects profited from “privileged information.” EADS stressed the facts were identical in both probes.
In private, however, sources close to the company were dismayed that the process could drag on for years, leaving uncertainty over one of its most recognized executives, responsible for some $30 billion of annual revenues.
“The problem is it will be a very long process. It could take years,” a person with knowledge of the case said. other said the negative publicity would help rival Boeing.
Leahy has for years been the public face of contests with Airbus’s U.S. rival to sell planes to global airlines. Insider trading is punishable in France by two years in prison and a fine worth up to 10 times the amount gained from the transactions. French court cases often drag on for years.
No restrictions were placed on Leahy under the terms of the investigation, the person familiar with the case said. The judicial move against Leahy and a former Airbus human resources manager emerged on Friday, over a month after they were formally placed under investigation.
It brings to seven the number of people facing further investigation as the judicial part of the probe widens.
French judges have already placed five people under investigation in the case, including former Airbus chief and EADS co-chief executive Noel Forgeard, who denies wrongdoing.