U.K. Escalates Airbus Probe -- WSJ
August 08 2016 - 3:02AM
Dow Jones News
Serious Fraud Office opens criminal probe related to use of
third-party consultants
By Robert Wall
LONDON -- Britain's top corruption investigator has opened a
formal probe into plane maker Airbus Group SE's use of consultants,
escalating an investigation that has been simmering for months.
Airbus said the U.K.'s Serious Fraud Office had opened a
criminal probe into the company related to irregularities
concerning third-party consultants that the British government
identified back in April.
The company said Sunday the probe is centered on allegations of
fraud, bribery and corruption in the civil-aviation business of the
plane maker, the world's No. 2 behind Boeing Co. Those allegations
are related to irregularities involving third-party consultants,
the SFO and Airbus said.
Airbus said in its statement it continues to cooperate with the
SFO, which confirmed the investigation on Sunday. The SFO, which
said it formally launched the probe last month, is soliciting
further information if it is available. SFO probes can drag out for
years.
The U.K. government disclosed in April that it was seeking
information from Airbus over how it used overseas agents. It said
at the time it was assessing whether to launch a formal, fraud
probe. The company disclosed at the time it had submitted flawed
information for export credit financing applications to U.K. Export
Finance, the government agency that provides financial backing to
some of the European plane maker's deals. That government
organization referred the information to the SFO to determine if
further action is required.
U.K. Export Finance said at the time, that it was "seeking
assurances around Airbus's current practice with regard to overseas
agents." The use of such agents is permitted, but needs to be fully
disclosed, the government office said.
Airbus has been cut off from export credit financing in the U.K.
amid the review. U.K. Export Finance said it hoped to conclude the
review quickly, without saying how long financing support would be
suspended.
That has been a drag on cash flow, and Airbus executives have
said they are working with the agency to restore credit financing.
That process is separate from the fraud investigation.
France and Germany also temporarily have frozen export credit to
Airbus.
The plane maker has said it expected the suspended financial
backing for some exports to be restored before year end.
This is the second SFO probe into Airbus activities. The
anticorruption agency also is investigating the business dealings
of a small Airbus unit in Saudi Arabia. The SFO investigation into
that case was announced in 2012. Airbus has said it is cooperating
in that probe as well.
Government-backed export credit agencies provide financing for
some Airbus jetliner deals to help foster exports. They also can
help ease airlines' access to commercial lending.
Write to Robert Wall at robert.wall@wsj.com
(END) Dow Jones Newswires
August 08, 2016 02:47 ET (06:47 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Boeing (NYSE:BA)
Historical Stock Chart
From Aug 2024 to Sep 2024
Boeing (NYSE:BA)
Historical Stock Chart
From Sep 2023 to Sep 2024