PARIS: French judges effectively suspended a trial involving allegations of insider trading in the shares of Airbus Group to allow a higher court to rule on whether the long-awaited procedure was constitutional.
The latest abrupt twist in one of the most high-profile corporate cases of recent years came after defence teams urged the French court system to take note of a recent European judgment upholding the right not to be tried twice.
Seven current or former managers and two former industrial shareholders are accused of illegally selling shares in what was then known as EADS, in March 2006, in the knowledge that things were about to go wrong at Europe’s largest aerospace firm.
All deny the charges and argue the trial is unwarranted because they were cleared by the French stock market regulator AMF in 2009, breaching the ‘double jeopardy’ rule upheld in March by the European Court of Human Rights.
“When you have been found innocent once and then you have to go through the whole thing again, this is complete torture,” Olivier Gutkes, a lawyer for former EADS co-chief executive Noel Forgeard, said.
Forgeard, 67, is one of four former executives charged with abusing privileged knowledge that deliveries of the world’s largest jetliner, the A380, would be delayed and that costs of that plane as well as the newer A350 were rocketing higher.
Current managers facing similar charges include John Leahy, the sales chief of planemaking unit Airbus who was not in court; Alain Flourens, who heads the A380 programme; and Andreas Sperl, former Airbus finance director and now head of a freighter unit. Also on trial are two former industrial shareholders, French media group Lagardere and German car firm Daimler , which reduced their stakes in April 2006.
The charges carry the risk of substantial fines and up to two years in jail, though prison sentences are rare.
On June 13, 2006, the announcement of new delays on the A380 and a staggered profit warning wiped 26 percent from the EADS stock price, erasing 5.5 billion euros of market value.
The revelations triggered a crisis in industrial relations between France and Germany, where the largest Airbus factories are based, and a rapid swirl of management changes. They also led to a lawsuit from a single investor hit by the share slide, which mushroomed into an eight-year investigation culminating in the trial scheduled to last for three weeks. “We want financial damages,” his lawyer Frederik Kanoy said.
Since that debacle, EADS has reshaped itself by reducing the role of the French and German governments and is enjoying record demand for its jetliners under a new name, Airbus Group.
Reuters
