Police detain former EADS head over insider trading
Former co-chief executive of EADS was taken into police custody Wednesday for questioning over suspected insider trading, say sources.29 May 2008
PARIS - The former co-chief executive of European aerospace group EADS, Noel Forgeard, was taken into police custody Wednesday for questioning over suspected insider trading, a source close to the case said.
Forgeard, 61, arrived at the Paris offices of the financial fraud squad accompanied by his
He was to answer questions about allegations that he and other executives and shareholders linked to the group sold company stock in the months before EADS revealed serious production delays in 2006 on its key A380 superjumbo project, the source added.
Under French law, Forgeard can be held for up to 48 hours after which, if police decide to pursue the matter, a magistrate could place him under formal investigation.
By late Wednesday, he had not been released.
A second, unidentified former EADS executive was also in custody Wednesday for questioning by the financial crimes unit in connection with the insider trading allegations, sources close to the case reported.
They said the man, aged 51, worked in Forgeard's office and had been monitoring Airbus operations within EADS.
An EADS spokesman questioned by AFP at the Berlin Air Show Wednesday declined to comment on Forgeard's detention. Airbus also declined to comment.
Forgeard has protested repeatedly that he was unaware of the depth of the A380 production difficulties when he sold large amounts of EADS stock. The sales were reported at the time to stock market authorities.
The revelations of the extent and depth of the A380 problems threw EADS and its Airbus aircraft unit into crisis in June 2006.
The EADS share price fell sharply, there was a boardroom shake-up - Forgeard resigned in July 2006 - and Airbus consequently launched a cost-cutting restructuring projected to shed 10,000 jobs.
To-date, no one has been placed under formal investigation by Judges Xaviere Simeoni and Cecile Pendaries.
In April, the French financial market regulator, the AMF, said it had found evidence of possible insider trading on the part of 17 EADS executives as well as the group's principal shareholders - the French media and technology company Lagardere and German automaker Daimler.
Reports at the time said Forgeard was among those named by the AMF.
A former advisor to president Jacques Chirac, Forgeard had relied partly on the French leader's backing to wage - and win - a fierce leadership struggle at the European aerospace group that saw him named co-head in 2005.
Before joining EADS, Forgeard spent seven years at the helm of Airbus where he was credited with winning market leadership from US manufacturer Boeing.
Despite its problems, EADS reported a robust return to profit earlier this month and said it hoped to save EUR 750 million this year to offset the rise of the euro currency.
Figures for earnings and sales exceeded analyst forecasts the day after Airbus acknowledged new delays - the fourth in two years - in deliveries of the A380 superjumbo, the world's largest civilian airliner.
It said it had a first quarter net profit of EUR 285 million, more than reversing a loss of EUR 10 million in the same period of last year.
EADS has many interests in the aerospace industry but its main business is the Airbus company that makes commercial and now military aircraft.
Analysts had forecast net profit of EUR 246 million and sales of EUR 8.94 billion.
[AFP / Expatica]