A source says about 20 executives at Airbus parent company EADS have been accused of massive insider trading in a preliminary report prepared by the French stock market regulator AMF.
The report has been sent to a judge who since November last year has been looking into allegations of illegal share dealing at the European Aeronautic Defence and Space Company (EADS), the source said.
String of difficulties
Airbus, a unit of the EADS, has been rocked by a series of management, production and design difficulties dating back to March 2006, and deliveries of its A380 have been delayed by 18 months.
The first delivery on October 15 to Singapore Airlines has been seen as the start of a new chapter for the company, given that manufacturing of the giant doubledecker plane has been the source of most of Airbus's woes.
French newspaper Le Figaro reported earlier on Wednesday that the AMF document alleged that management and shareholders at EADS had engaged in heavy insider trading by selling shares before major problems at Airbus were made public.
Airbus announced delays to deliveries of the A380 on three different occasions — in March, June and October of 2006 — which caused a collapse in the value of EADS shares.
The source close to the affair said the AMF report was prepared and sent to the public prosecutor here last month and was given to investigating judge Xaviere Simeoni several days ago.
The AMF confirmed later that it had sent the prosecutor a note on possible insider trading at EADS, but declined to give further details.
Complaints from shareholders
The judicial probe was opened in November 2006 in response to complaints, notably from Appac, an association of small French shareholders.
Mr Simeoni and another judge assigned to the case have since ordered searches to be carried out at the headquarters of EADS and one of its principal shareholders, the French media and defence company Lagardere.
Le Figaro claimed the AMF report cited former Airbus chief executive and EADS co-chief executive Noel Forgeard, who resigned in July last year amid a scandal over the timing of his share dealings and problems with the A380.
Current Airbus chief Thomas Enders and a number of other directors, past and present, were also named by the paper.
More than 1,000 cases
Quoting the document, the paper added that 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 says problems in the key Airbus A380 superjumbo programme had been raised as early as June 2005 at an EADS board meeting — nine months before any difficulties were made public.
The major industrial shareholders of EADS, German car giant DaimlerChrysler and French media and defence group Lagardere, each sold 7.5 percent of their holdings on April 4, 2006 for 2.0 billion euros (2.8 billion dollars).
Shares in EADS fell 26 percent on June 14 that year after the second warning by Airbus about A380 deliveries.