France's markets watchdog began hearings on Nov. 23 into claims 17 current and former EADS aerospace executives made huge profits with inside information about delays in the Airbus A380 project.
The executives and three firms -- EADS and shareholders Chrysler and Lagardere -- are accused of selling stock options in March 2006 because they knew the share price would slump when the production delays were made public. They sold their stock options when the shares were around 30 euros, near their historic high. The price plummeted by 26% in a single day when the delay was officially announced in June that year.
The executives face fines of up to five million euros if convicted by the Financial Market Authority (AMF) after the hearings, which come after a 30-month probe and which are not open to the press or public.
Former EADS co-chairman Noel Forgeard said he was "serene" as he arrived at the hearing on Monday and certain that his lawyers would prove he had not misused inside information when he made huge profits selling his stock options. Forgeard faces the biggest fine of 5.45 million euros. He earned 3.5 million euros when he sold his European Aeronautics Defence and Space (EADS) options, but his lawyers argue they they can show that he began selling the stocks before managers became aware of the A380 problems.
Thomas Enders, current chief executive of EADS' Airbus unit, said he too was sure he would be cleared by the week-long hearing by the AMF held in the Palais Brogniart, the former home of the Paris stock exchange.
Lagardere, a French media group, and Daimler, a German carmaker, between them sold 7.5 percent of the shares in EADS -- in which the French state is also a shareholder -- and are being heard as corporate entities.
A confidential AMF report leaked in July said that seven current and former EADS executives made millions of euros by exercising their company stock options in March 2006, just before the A380 delay was announced. But the report found that Thomas Enders, as well as shareholders Lagardere and Daimler, had not engaged in insider trading.
Apart from Forgeard, the executives named in the report are Airbus commercial director John Leahy, former Airbus finance director Andreas Sperl, and former EADS managing director Jean-Paul Gut.
Former Airbus vice president Olivier Andries, former Airbus human resources director Erik Pillet and Airbus Centres of Excellence chief Alain Flourens were also named.
EADS chief executive Louis Gallois, in an interview on Nov. 23, pledged support for his executives, adding that "everyone is in a hurry to move on from an affair that is more than three years old."
Copyright Agence France-Presse, 2009