Former minister defends himself in EADS scandal

5th October 2007, Comments 0 comments

5 October 2007, PARIS (AFP) - The man at the center of a brewing political scandal over alleged insider trading at European aerospace giant EADS told a Senate committee Friday the government was "beyond reproach" in the affair.

5 October 2007

PARIS (AFP) - The man at the center of a brewing political scandal over alleged insider trading at European aerospace giant EADS told a Senate committee Friday the government was "beyond reproach" in the affair.

Former finance minister Thierry Breton said he was "shocked" by suggestions that the government had a hand in the reported illegal sale of millions of euros in shares by top EADS executives and two corporate shareholders just before they announced big problems at its subsidiary Airbus.

"The state is beyond reproach in this affair," Breton told a hearing of the Senate finance committee called to shed light on the scandal at the European Aeronautic Defence and Space Company (EADS).

"I understand perfectly the strong emotions that this affair has evoked in public opinion," said Breton, now a senior lecturer at Harvard University's school of business administration.

But he added that the state "acted in an exemplary fashion" and did not dump its shares in EADS before delays in the production of Airbus' superjumbo A380 were made public in June 2006.

Le Figaro newspaper this week reported that 21 top EADS executives as well as Germany's DaimlerChrysler and the French Lagardere group were cited in a report by the financial market watchdog AMF for insider trading.

The French state is a major EADS shareholder with 15 percent, while a consortium of other investors including German regional governments holds 7.5 percent.

The opposition Socialists have raised questions over the purchase by the state-owned bank Caisse des Depots et Consignations (CDC) of EADS shares owned by German automaler DaimlerChrysler and defence and media group Lagardere, whose chief executive Arnaud Lagardere is a close friend of President Nicolas Sarkozy.

Breton told the Senate hearing that he was "truely displeased" when he found out that the CDC had bought shares from Lagardere but that he was not given any advance notice of the transaction and only learned about it in the press.

Sarkozy's spokesman separately said that the president did not have any knowledge of Airbus' problems when he served as interior minister in the former government.

He added that Sarkozy believes that "all of the answers must be given" to mounting questions over the role of the former government in the affair.

"There is a very high demand for transparency," said presidential spokesman David Martinon.

Airbus chief executive Thomas Enders, one of the executives allegedly cited in the AMF report, strongly denied the allegations in an internal memo seen Friday by AFP.

"I categorically reject the allegations and insinuations in the press," Enders said.

The reported illegal selling, according to Le Figaro, took place in 2005 and early 2006.

EADS in June 2006 announced major production and delivery delays in its key A380 superjumbo project that sparked a collapse in the parent company's share price.

AFP

Subject: French news

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