New York/Paris/New Delhi: French authorities joined the UK in a corruption probe of Airbus Group SE centred on allegations of fraudulent practices related to selling planes and arranging aircraft financing.
The probe by the Parquet National Financier follows steps by the UK’s Serious Fraud Office in August to look into possible bribery and corruption in Airbus’s civil aviation business related to third-party consultants, the Toulouse, France-based plane maker said late on Thursday. The two authorities will coordinate with one another, Airbus said.
The expanded probe was the result of self-reporting and “is not a new issue”, Chief Executive Officer Tom Enders said on Friday at a press conference in New Delhi. Airbus has said it dropped the questionable middlemen and expects suspended financing guarantees to be restored. Enders said on a conference call in February that the company’s head office was “crawling with lawyers” as it performed internal audits.
Airbus had flagged to UK regulators nd the European Export Credit Agencies last year “misstatements and omissions” involving outside contractors in some export-financing applications, which it found through an internal probe. Credit agencies, including UK Export Finance and state institutions in France, Germany and Spain, suspended some of the backstop financing that Airbus uses to help sell commercial aircraft.
About 7 per cent of Airbus’s airline customers received backing from such agencies in 2015, while leasing companies generally provide about 45 per cent of financing. The aircraft manufacturer had expected the government backing to resume by the end of 2016 following its pledge to drop the use of middlemen, though the assistance hasn’t yet been revived.
Shares fall
Airbus shares fell 1.1 per cent to 69.62 euros (Dh274) as of 9.15am in Paris after dropping as much as 2 per cent. That pared the stock’s gain this year to 11 per cent, valuing the plane maker at 53.8 billion euros.
The French manufacturer isn’t the only company that has been tripped up attempting to manage growth in the Middle East, Asia and other fast-growing regions. Companies often use intermediaries with local connections to help establish a presence in new markets, where setting up local offices can take years. The practice isn’t illegal, but it can complicate oversight.
Jet-engine maker Rolls-Royce Holdings Plc was under investigation for years after acknowledging possible corruption related to the use of foreign consultants. The UK company agreed in January to pay about $800 million (DH2.9 billion) to resolve probes and admitted paying bribes to win contracts in countries such as Thailand, Angola and Iraq.
