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UK opens corruption probe into Airbus jet sales

Monday, August 08, 2016 - 01:42

Airbus Group faces a potentially lengthy and disruptive probe over its core commercial jet sales after Britain's fraud police launched a criminal investigation into suspected irregularities in the use of third-party agents to win airliner contracts. Hayley Platt reports

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It's not the news Airbus wanted to hear. An investigation, which has so far been under the radar, has now turned into a criminal one. Britain's Serious Fraud Office is looking into allegations of possible fraud, bribery and corruption over the use of third-party agents to win commercial jet sales. It relates to so-called export credits in Airbus' passenger jet business - a method commonly used by planemakers to obtain commercial loans. And the news knocked shares slightly. SOUNDBITE (English) IG, SENIOR MARKET ANALYST, CHRIS BEAUCHAMP, SAYING: "It is certainly a worrying sign that you've got this major investigation but these things tend to run and run. If you look at the history of BAE and Rolls Royce when their own questions have come under the spotlight, there's nothing too much to worry about in terms of share price performance." Airbus Group was already being investigated by the SFO over a $3.3 billion communications deal with Saudi Arabia. That's been going on for 4 years. The latest inquiry involves discrepancies over the amount of agents' fees disclosed in applications. And why the names of some third party agents are allegedly missing. Rules in Britain require companies applying for export support to identify third parties involved in any sale. It could take years before the matter is resolved, potentially disrupting business and the group's reputation. SOUNDBITE (English) IG, SENIOR MARKET ANALYST, CHRIS BEAUCHAMP, SAYING: "If the SFO (Serious Fraud Office) widens its investigation, that will be the hit to the shares. If it drops off the radar I think they'll be other things to worry about with Airbus." The news came after figures for July showed Airbus had almost closed the sales gap with rival Boeing. The European planemaker says it's co-operating with the authorities.

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UK opens corruption probe into Airbus jet sales

Monday, August 08, 2016 - 01:42