Business EADS

business EADS comprises two shutters: on the one hand, a suspicion of Offense of initiate on behalf of the top-ranking executives of Airbus and EADS at the time of the exercise of their stock-options in November 2005 and in March 2006 before the public advertisement of the delays of delivery of the large A380 transport aircraft on June 13rd, 2006; in addition, the transfer, on April 4th, 2006, by DaimlerChrysler and the Group Lagardere of 7,5% of the capital of EADS each one with French institutional investors like the Deposit and consignment office (CDC), involving for them an important latent depreciation.

Many frameworks of EADS would have carried out important appreciations by selling titles EADS in March 2006, before the official announcement of delays of delivery of the very large A380 transport aircraft on June 13rd, 2006. This advertisement had involved a fall of the course of the action of the group of more than 36% in only one meeting. The people concerned deny any offense and ensure not to have known anything the problems of A380.

Investigations

Judicial enquiry

A judicial enquiry in progress has as an aim of the suspect operations carried out in 2006, right before the advertisement of difficulties of group EADS, in particular concerning A380. The judges Philippe Courroye and Xavière Simeoni were appointed in November 2006 to inform open legal information against X for offense of initiate, concealment of offense of initiate and diffusion of false or misleading information, following a complaint of small shareholders. They must determine if Noel Forgeard and several members of the direction of EADS or not acted in a fraudulent way by using information privileged to resell titles at the good moment.

According to the Platform of May 29th, 2007, the leaders of EADS were with the current as of on March 6th, 2006 of the delays of the program A380, incentive the leaders of the European group of defense and aeronautics to exert their stock-options as of the following day.

In 9 months a posterior phone conversation between the business man Jean Galli Douani, and the chief technical officer of Airbus of then, Alain Garcia, this last would have entrusted that of " serious industrial problems of Airbus" would have been evoked at the time of this board of directors as well as delays " conséquents".

Understood by the financial brigade on May 2nd, within the framework of the survey carried out by Xavière Simeoni, Jean Galloi Douni would have given the recording of this conversation to the legal authorities. EADS contradicted that Alain Garcia, party reprocesses in April 2007 of it, could make these remarks.

A note of Raymond Levy, president of the board of trustees of the Groupe Lagardere, reveals that " the difficulties of the A380 were underestimated ". According to the group, this note would have been written on September 13rd, 2006 and would be posterior at the date of sale of the actions object of an investigation of the authority of the financial markets (MFA). However, another source affirms that it would be quite former.

Inquire of the MFA

The investigation of the Autorité of the financial markets (MFA) relates to the exercise by certain leaders of EADS and its Airbus subsidiary company of their stock-options in November 2005 and in March 2006 and on the transfer by Daimler and Lagardere (by the Sogeade) of 7,5% of the capital of EADS each one on April 4th, 2006 to French institutional investors, in particular the Deposit and consignment office (CDC). It should finish with the beginning of the year 2008.

Parliamentary commission

The Committee of supply of the National Assembly auditioned Arnaud Lagardere on October 25th, 2007.

Protagonists

The position of the French and German States

The strategic and geopolitical context of these financial transactions is particularly sensitive because the group EADS is a Franco-German company which represents at the same time the floret of technology military and aeronautical European and the symbol of the co-operation between these two countries. However, this situation is governed by a precise regulatory system, result of long negotiations as for the roles of the respective governments in control and the financing of the company.

Many personnalitées political Frenchwomen of which some with the businesses at the time of the facts, discussed this file the ones to criticize either a bad management of the national investments or an operation taking part in an offense of initiate intended to protect the financial interests individuals at the expense of the Deposit and consignment office, the others, whose majority UMP which was already with the capacity in 2006, refute mainly these charges on the basis of fact that the French State and in particular the government, was not informed of the difficulties to the front of which group EADS even went was not even with the current of the behavior of these operations financial or that those were carried out according to the rules, in particular in dialog with the German State whose participation is held to equalize that of the French State constantly.

Chronology

The chonology of the facts is in the middle of the procedure and the possible offense of initiate.

2005

  • January 18th, 2005: Official presentation on the ground of the Airbus A380.

  • April 27th, 2005: First flight of a380 Airbus.

  • Since the launching of A380, of the weekly meetings is organized in Airbus Toulouse to take stock with the various speakers on the advance of the program. This information is addressed to the direction of Airbus and more particularly to the " shareholder committee" (" committee of the actionnaires") airframe manufacturer.

  • May 3rd, 2005: After having estimated " possible, even probable" a delay of its deliveries of A380, the European airframe manufacturer announces first a six months shift of the calendar. The first delivery with Singapore Airlines is deferred to the second half-year 2006.

  • Be 2005: Arnaud Lagardere, president of the Group Lagardere, wishes to leave the capital of EADS, owner of Airbus. In addition, of the rumors make state of the entry of Russian investors and qatariens in the capital of EADS.

  • November 2005: First suspect sales of titles EADS on behalf of leaders and shareholders of the group.

2006

  • January 9th, 2006: At the time of the ceremony of the wishes of the Group Lagardere, Arnaud Lagardere announces a nearest reduction of its participation in EADS.

  • Mid-January 2006: First work meeting with the seat of the Deposit and consignment office (CDC), Street of Lille to Paris, on the topic of a repurchase partial of the actions of EADS of the Group Lagardere by the CDC, in the presence of Alain Maillot, lawyer of Lagardere, Matthieu Pigasse, associate-manager of the Bank Lazard which helps the bank Ixis to sell the actions. Other French institutional investors as the group of the Savings banks, the National bank of precaution and the Mutual credit are also requested.

  • February 22nd, 2006: Dominique d' Hinnin, finance manager of the Group Lagardere, meets Alain Demarolle, adviser with the economic affairs of the Prime Minister Dominique de Villepin. He gives a note without heading to him according to which the Lagardere group wishes to reduce half her participation in EADS, that is to say a reduction of 15% to 7,5% in the capital of EADS. However, the Lagardere group would remain " the French industrial operator of EADS ". The Deposit and consignment office (CDC) there is designated as the potential rescuer. This memo will be exhumed with the Ministry for finances in October 2007 by the enquéteurs of the Tax inspectorate, made by the Minister for the economy Christine Lagarde. Thierry Breton, the Minister for the time, known as never to have seen it; its cabinet having classified it " without suite" and transmitted to the Agency of the participations of the State (APE).

  • March 6th, 2006: During a weekly meeting, the leaders of Airbus note that they will not be able to provide the 29 A380 planned for 2007. A new internal plan of production brings back their forecasts to 24 apparatuses (the Platform, May 29th, 2007).

  • March 7th, 2006: The board of directors of EADS take a decision on the accounts with the presence of Alain Garcia, chief technical officer of the group which evokes the gravity of the delays of A380. Following this council, Noel Forgeard obtains the authorization to sell his stock-options. He thus carries out an appreciation of 2,5 million euros on March 8th, 2006.

  • March 8th, 2006: EADS announces a clear benefit record of 1,68 billion euros (+ 39%) in 2005.

  • Mid-March 2006: The Deposit and consignment office (CDC) decides to acquire 2,25% of the 7,5% of the capital of EADS sold by the Groupe Lagardere. Francis Mayer, the managing director of the CDC, is hospitalized and the operation is controlled by Dominique Marcel, finance manager of the CDC. Sure of the information of the services of the Prime Minister and the Ministry for finances, the CDC does not give an account of the operation to the State.

  • March 20th, 2006: The groups Lagardere and DaimlerChrysler, shareholders private of EADS, announce that they will yield each one 7,5% of the capital. The operation brings back to each one 2 billion euros.

  • March 24th, 2006: The action EADS culminates with 35,13 euros.

  • March 28th, 2006: Signature of the sale of actions EADS between the CDC and the Lagardere group, via the Bank Ixis and of the Bank Lazard], confirming an escape in connected Duck.

  • March 29th, 2006: Presentation at Airbus of the impact study of the passage from 29 to 24 A380. This reduction removes all the margins of benefit awaited. A380 program will have a null profitability but will not affect the turnover of EADS.

  • April 3rd, 2006: Board of directors of the Sogeade, company Holding gathering the French intérêst in EADS (French State and Lagardere group), prepared Luc Rémont, principal private secretary of the Minister Thierry Breton. The State gives up its right of pre-emption on the actions sold with the CDC and is not opposed to the sale. The representative of the State to the Sogeade Philippe Pontet does not oppose it either. In June 2006, the finance manager of the CDC Dominique Marcel will declare on the official report at the commission of monitoring of the CDC: " Within the framework of the pact of shareholders (of EADS), the State authorized the CDC to carry out this acquisition. " Questioned on this passivity, the former minister for Finances Thierry Breton will say that it is about a " legal mistake in interpretation ".

  • April 4th, 2006: Officialization of the sale of 7,5% of the capital of EADS by the Group Lagardere with French institutional investors, mainly the CDC. The chairman Arnaud Lagardere will always affirm not to be informed of the extent of the difficulties of industrialization of A380, during the transfer of his titles EADS. This sale is the subject of a judicial enquiry and an investigation of the authority of the financial markets (MFA) on possible offenses of initiates.

  • April 4th, 2006: The deputy UMP Philippe Auberger, president of the commission of monitoring of the CDC, is also informed of the operation. The other Members of the Commission will be to it the following day. Marianne Barbat-Layani replaces there the Directeur Treasury Xavier Musca, representative official of the State, and does not say anything. " the Treasury, it was the dumb man of the seraglio " , Jean-Pierre Balligand will declare later, appointed PS and member of this commission.

  • April 11th, 2006: The sale of actions EADS by the Lagardere group is made public.

  • April 11th, 2006: The Presidency of the Republic maintained with the variation are informed at the CDC of the methods of the operation. Stephan Dupre the Tower, adviser with the industry of Mr. Chirac, telephone thus with Dominique Marcel, finance manager of the CDC. Augustin de Romanet, assistant general secretary of the Elysium, contacts Anne de Richecour, close associated Francis Mayer. It worries about the diplomatic consequences of the operation, in particular with respect to the Germany, Co-shareholder of EADS. He will become managing director of the CDC in 2007.

  • April 11th, 2006: At a meeting of the committee of the shareholders of Airbus, the owner of the airframe manufacturer, Gustav Humbert, does not speak more than 24 planes. It envisages delays but cannot quantify them.

  • April 26th, 2006: Raymond Levy, president of the board of trustees of the Group Lagardere, would have written on this date according to the group, that " the difficulties of A380 were under-estimées". However, the real date of this note is disputed. The Canard Enchaîné of May 30th, 2007 evokes the same report of a conversation between Raymond Levy and the director of the strategy of Airbus, Olivier Andriès, by stressing that the investigators charg3e d' affaires of possible offenses of initiates within EADS, have " the certainty which this conversation is former in March 2006 ".

  • May 29th, 2006: The Board of directors of EADS request a clarification and precise details on the program, on the level of the deliveries and the financial consequences.

  • June 13rd, 2006: Hardly two months after the sale of actions EADS of the Group Lagardere with the CDC, Airbus inform its customers of a second delay from six to seven months of the A380, limiting the deliveries in 2007 to nine apparatuses. The crisis comes from problems of wiring to the factory of Hamburg.

  • June 14th, 2006: The title EADS plunges from 26,32%, with 18,73 euros. For the Case of the deposits and consignments (CDC), latent depreciation is of 200 million for an investment of 600 million euros. The CDC declares with the press that it will carry felt sorry for in the event of untrue communication of EADS.

  • June 16th, 2006: the Autorité of the financial markets (MFA) announces that it opened an investigation. It indicates that it inquires " since several weeks on the market of title EADS " and that she suspects the leaders and the shareholders of EADS to have sold their actions with highest (March 24th, 2006), a few weeks before the revelation of the delays of the Airbus A380 (June 13rd, 2006). As example, the copresident of EADS, Noel Forgeard, carried out an appreciation of 3,5 million euros in March 2006, like his own children. He will resign on July 2nd, 2006. In November 2006, the Parquet of Paris will open a Legal information against X for " Offense of initiates, diffusion of false informations and concealment on the titer" EADS. It is the dénut Affaire EADS.

  • June 21st, 2006: Several individual shareholders deposit felt sorry for Délit of initiate.

  • October 3rd, 2006: EADS announces that finally the delay of the program is increased to two years. Only one apparatus will be delivered in 2007.

  • November 23rd, 2006: The Parquet of Paris opens a Legal information against X… for " Offense of initiate, diffusion of false informations and concealment on the title of the société".

  • December 12th, 2006: Searchings are carried out by the police force to the Parisian seat of EADS and to that of the Groupe Lagardere.

  • December 14th, 2006: The Association of the minority shareholders (Adam) decides to carry felt sorry for " offense of initié" or " information trompeuse".

2007

  • March 9th, 2007: EADS announces a clear benefit in fall to 99 million euros in 2006, because of the losses of Airbus.

  • April 24th, 2007: Several frameworks of the group EADS, whose Jean-Paul Gut, is convened for interrogation with the financial brigade.

  • May 14th, 2007: The delegated general director of EADS, Jean-Paul Gut, would claim a Indemnité of exit (Golden parachute) of at least 12 million euros. This information is contradicted by group EADS.

  • May 22nd, 2007: MFA hears the delegated general director of EADS Jean-Paul Gut on possible offenses of initiates.

  • May 29th, 2007: The French copresident of EADS Arnaud Lagardere is auditioned by MFA.

  • October 3rd, 2007: Le Figaro publishes extracts of a report/ratio of stages of MFA transmitted to the parquet floor of Paris. It is overpowering for the leaders and the shareholders of EADS and point an offense of massive initiate on behalf of the leaders of EADS. The final report of the MFA will be returned public beginning 2008. EADS and Thomas Enders, president d' Airbus, deposited felt sorry for against X for this disclosure.

  • October 30th, 2007: The Committee of supply of the Senate auditions Dominique de Villepin, Prime Minister at the time of the transaction in March - April 2006. He declares that, neither him, nor the services of the Prime Minister, were informed of the difficulties of the Airbus A380 before their official announcement in June 2006. He confirmed the transmission of notes of information by the Groupe Lagardere with his services as with those of the Minister for Finance Thierry Breton at the beginning of 2006. The Lagardere group has " thus; informed the State in accordance with the pact of shareholders of his intention of vente". He affirmed that the State was to be informed but did not have in to give the authorization. According to him, Deposit and consignment office (CDC) forever informed Matignon of the repurchase of most of actions EADS sold with the full price by the Group Lagardere, although one of the documents of the Lagardere group of at the end of February 2006 " mentioned the potential interest French investors (...), of which the CDC ".

External bonds and sources

  • Of the leaders of EADS would have been informed of the delays of A380 , according to " Tribune" , Le Monde, May 29th, 2007

  • EADS: Lagardere heard nine hours by the MFA , nouvelobs.com, May 30th, 2005 * Offenses of initiates at EADS: leaders again over the bolster , AFP, May 29th, 2007 * Offense of initiates with EADS: Chronology , nouvelobs.com, May 31st, 2005
  • Offense of initiate with EADS: interrogations on a note , nouvelobs.com, May 31st, 2007

References

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