Airbus Sets Up New Group to Review Compliance Amid Corruption Probes--Update
May 22 2017 - 7:51AM
Dow Jones News
By Robert Wall
LONDON--European plane maker Airbus SE has established a new
compliance review group led by outsiders amid allegations of
corruption being investigated by British and other fraud
watchdogs.
It is the second time in less than five years Airbus has sought
outside help to clean up its internal processes after fraud
allegations surfaced. Some of the issues that led to the compliance
review in 2012 are still under scrutiny, including the company's
actions in a more than $1 billion dollar deal to sell Eurofighter
Typhoon combat jets to Austria a decade earlier.
The establishment of the new compliance panel was triggered by
the latest controversy that first surfaced a year ago around
Airbus's use of middleman to win commercial plane deals. The panel,
which will report to Chief Executive Tom Enders and the board, will
have an open-ended advisory role.
"To embed irreproachable behaviors in all our business
undertakings sustainably, we must take a hard look at both our
systems and our culture," Mr. Enders said Monday in a statement
announcing the latest review.
Austrian officials said Mr. Enders is one of the people it is
investigating in its probe, which is examining whether the company
overcharged the government for the sale of military planes. Airbus
has denied wrongdoing and said it was cooperating with
authorities.
The Austrian probe is one of several corruption investigations
Airbus is battling. The British Serious Fraud Office has been
examining alleged bribery by an Airbus subsidiary in business
dealings in Saudi Arabia for several years. Airbus launched a
compliance review in 2012 amid concerns over the Austrian deal and
the British probe into the actions of its subsidiary in Saudi
Arabia. At the time, it said it had tightened its compliance
procedures and taken other steps aimed at preventing future
slip-ups.
In 2016, Britain's SFO also began investigating Airbus's
possible misuse of middlemen in winning plane deals. French
officials also are probing the use of third-party intermediaries
used during the sale of commercial airliners. Airbus has also said
it had hired forensic accountants to help review what happened and
has frozen payments to third-party consultants.
The new compliance review panel will include David Gold, who
also reviewed compliance proceedings at Rolls-Royce Holdings PLC.
The British aircraft engine maker at the time was under scrutiny by
fraud investigators. Rolls-Royce this year entered deferred
prosecution deals with the SFO, U.S. Department of Justice and
Brazilian authorities and agreed to pay more than $800 million in
fines. Noƫlle Lenoir, a former French Minister of European Affairs,
and Theo Waigel, an ex-German finance minister also complete the
group.
The three panel members come from countries that are some of
Airbus's biggest financial backers. The U.K., German and France,
which typically support some jetliner deals with export credit
finance guarantees, have suspended that assistance amid the fraud
probes. The lack of export credit backing has weighed on Airbus
cash flow.
An Airbus official said the company was not asked to take the
action but was trying to demonstrate it is taking tangible steps to
improve ethics performance.
Write to Robert Wall at robert.wall@wsj.com
(END) Dow Jones Newswires
May 22, 2017 07:36 ET (11:36 GMT)
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