By Tim Hepher and Gérard Bon
PARIS Dec 2 Two founding industrial
shareholders of Airbus parent EADS will join a group of
current and former managers on trial in a long-running insider
trading case, prosecutors said on Monday, but EADS called for
charges to be dismissed.
In the latest twist to a saga that has haunted EADS ever
since its A380 superjumbo hit unexpected development delays in
2006, an official at the French public prosecutor's office said
French media group Lagardere and German carmaker
Daimler would stand trial.
Lawyers involved in the case reiterated that seven current
and former managers including Airbus sales chief John Leahy also
face trial over share trades carried out before the announcement
of delays led to a sharp fall in the EADS stock price.
Leahy, who like other individuals involved in the case has
firmly denied wrongdoing, could not be reached for comment.
But both EADS and Lagardere expressed surprise that the case
was still being played out in the courts despite the parties
having been cleared by stock market regulators in 2009.
Without naming individuals, EADS also expressed support for
managers involved in the case. Leahy, a U.S. citizen, is one of
the industry's most high-profile figures and the most senior
executive connected to the case still employed by EADS.
"It is EADS' view that all concerned parties should be
exonerated in line with the 2009 decision of the (AMF)," an EADS
spokesman said in an emailed statement, referring to the French
stock market regulator's decision that year to exonerate the
company and its executives after a three-year investigation.
"EADS reiterates its full support of and confidence in its
concerned managers, and remains confident that they will once
again demonstrate that these accusations are groundless and
should be fully dismissed," the EADS spokesman added.
Lagardere referred questions to its lawyer, who said it
"notes with surprise the investigating magistrate's decision to
put various shareholders and managers of EADS on trial".
In Stuttgart, a spokesman for Daimler said: "We can confirm
the existence of the charge; we do not yet know the details of
the document, and we will therefore examine the allegations."
No trial date has been fixed, the Daimler spokesman added.
The judicial and regulatory probes were triggered after EADS
suffered a 26 percent fall in its share price in June 2006
following the announcement of worsening delays in the A380. The
world's largest airliner eventually entered service in 2007.
The AMF said in Dec. 2009 it had not found any evidence that
Leahy and others who exercised share options in the weeks and
months before the announcement knew at the time about the extent
of problems then threatening the A380 project.
Groups representing small shareholders protested about the
decision and said the judicial investigation should continue.
Lagardere and Daimler, originally the core industrial
shareholders of EADS, have since exited the group as part of a
broad restructuring of its ownership in the past year.
Insider trading is punishable in France by a fine worth up
to 10 times the amount gained from the transactions and - in the
case of individuals - up to two years in prison.
The amount involved in dealings by current and former EADS
executives, and the former industrial shareholders, is not
contested but French law requires prosecutors to prove that any
gains resulted from "privileged information".
In 2007, Leahy said the sheer scale of people involved in
company share schemes who were originally suspected of having
access to such information - some 1,200 people - proved the
allegations of dealing on inside information were false.
Also involved in the case is former Airbus chief executive,
and later EADS co-chief executive, Noel Forgeard who has also
denied any wrongdoing. Forgeard was not available for comment.