PARIS - A former co-CEO of Airbus parent company EADS, Noel Forgeard,
was hit with preliminary insider trading charges Friday in an
extensive probe into stock sales by more than a dozen former and
current executives at the European planemaker.
The investigating judges filed the charges overnight and ordered
Forgeard freed, who had been in the custody of financial police for
two days, pending further investigation, his lawyer Jean-Alain Michel
Forgeard is at the center of one of France's largest alleged insider
trading probes, involving one of Europe's biggest industrial players
European Aeronautic Defence & Space NV.
Investigators are looking into the sale of millions of euros (dollars)
worth of EADS shares by top executives and shareholders before a June
2006 announcement of delays for the A380 superjumbo that made EADS
shares crash 26 percent in one day.
France has two related probes, one by the Paris prosecutor, the other
by the AMF, the Financial Markets Authority. The judges' probe into
alleged insider trading at EADS was opened in late 2006.
The AMF's investigation focusses on share sales by 17 executives and
shareholders DaimlerChrysler AG and Lagardere SCA.
EADS spokesman Pierre Bayle declined to comment on the charges against
Forgeard and the possible investigation of executives still working
EADS CEO Louis Gallois said in a letter to employees last month that
his "confidence in EADS managers is total."
Forgeard's bail was set at $1.56 million. He was ordered not to speak
with the company's former director of cabinet, according to a judicial
source who spoke on condition of anonymity because he was not
authorized to speak with the media.
Forgeard, who has denied wrongdoing, said during questioning
"that he had not committed insider trading" and that to his
knowledge neither had any other EADS executives, his lawyer said.
Preliminary charges under French law mean the investigating judges
have strong reason to suspect involvement in a crime and give them
more time to investigate. Judges decide later if there is enough
evidence for a trial.
Authorities detained Forgeard on Wednesday morning. It was a new
embarrassment for EADS as it emerges from a rocky couple of years
plagued by trouble with the A380 and management turmoil.
The company in the midst of a massive restructuring program and
struggling to cope with the ever more expensive euro, which eats into
profits. Unlike Boeing Co., many of Airbus' costs are in euros while
it sells its planes in dollars.
Forgeard was named co-CEO of EADS with Thomas Enders, now head of
Airbus, in 2005. Between November 2005 and March 2006, Forgeard, his
family members and other EADS executives exercised millions in stock
The delays to the A380 were announced in June 2006, and Forgeard
resigned weeks later.
Associated Press writers Pierre-Antoine Souchard and Emma Vandore
contributed to this report.
- 185 Corruption