Prosecutor told of insider trading at EADS
3 October 2007, PARIS (AFP) - Shareholders and executives at Airbus parent EADS engaged in "massive" insider trading, a press report said Wednesday, citing a document that also alleges the government had been aware of difficulties at EADS prior to the lucrative sale of shares.
3 October 2007
PARIS (AFP) - Shareholders and executives at Airbus parent EADS engaged in "massive" insider trading, a press report said Wednesday, citing a document that also alleges the government had been aware of difficulties at EADS prior to the lucrative sale of shares.
Le Figaro said the French market regulator AMF had provided the public prosecutor with a note detailing the alleged illegal trade, which reportedly saved participants a total of 90 million euros (127 million dollars) after a 2006 profit warning prompted a collapse in the EADS share price.
Quoting the document, the paper said a total of 1,200 alleged cases of insider trading on the shares were detected, but that the regulator decided to move quickly by concentrating on 21 people, including executives at EADS and Airbus as well as major shareholders.
It cited the AMF as describing the selling, which took place between November 2005 and March 2006, as "simultaneous and massive" in scale. It said problems in the key Airbus A380 superjumbo programme that led to a June 2006 profit warning had been raised as early as June 2005 in an EADS board meeting.
According to the paper the documents are "damaging" for the French media and defence group Lagardere and German automaker DaimlerChrysler, both shareholders in the European Aeronautic Defence and Space Company, as well as key executives at EADS and Airbus.
Noel Forgeard, a former EADS co-chief executive who left under a cloud in July 2006, has denied all accusations of insider trading.
Arnaud Lagardere, CEO of Lagardere, has likewise denied insider trading. The Lagardere group held a 15-percent stake in EADS which it is reducing to 7.5 percent.
Le Figaro said that the French finance ministry was also informed of the problems ahead for EADS but that it had nevertheless given its green light for the sale of shares by Lagardere at the time.
"If this is confirmed, it will be extremely serious," French secretary of state for European affairs Jean-Pierre Jouyet said in a television interview.
"It shows the need to take steps to clean up the financial environment."
In early trading here EADS shares were down 0.64 percent at 21.74 euros while those of Lagardere had lost 4.05 percent to reach 59.30 euros.
In Frankfurt DaimlerChrysler was down 0.67 percent at 72.27 euros.
Subject: French news