Airbus faces new corruption allegations
In the beginning of October 2017, Munich prosecutors announced a fraud investigation into Airbus Group, Der Spiegel informs. According to the accusation, Airbus is suspected of having paid bribes around the world. Germany is the 4th country which conducts an investigation into Airbus, joining Austria, UK, and France.
Selling of Eurofighter jets
The Munich prosecutor's office believes the Airbus authority allegedly took part in creating a network of shell companies around aviation maintenance provider Vector Aerospace and with the help of these companies, bribes were handed over to Austrian officials who made the decision to buy 15 Eurofighter fighters in 2003.
Not long after the deal was signed, allegations began circulating that politicians and others involved in the deal were receiving kickbacks, the Austrian Press Agency informs. In 2007 a probe was set up to look into possible bribes but came to no concrete conclusion. In February 2017, Austria sued Airbus and claimed compensation worth €2 billion by alleging that corruption and bribery were involved in the purchase of the jets. Airbus denied all allegations.
German prosecutors also suspect that in 2016, resorting to corruption schemes, Airbus sold a certain number of aircraft in different countries, including Kazakhstan, China, and Indonesia.
Other corruption investigations
In August 2016, the Serious Fraud Office (SFO) of Great Britain initiated a criminal investigation into Airbus on suspicion of corruption, fraud, and bribery. SFO claims that there had been corruption in Eurofighter jet sales to non-Western markets and that the company used third-party consultants in concluding transactions. Besides EU countries, the jets have been exclusively sold to Saudi Arabia, Kuwait, and Oman.
According to Reuters, the investigations by Britain’s Serious Fraud Office were triggered by Airbus in 2016 when it reported itself to UK authorities after uncovering flawed documents over the use of intermediaries in airplane sales.
In March 2017, Airbus confirmed that France’s financial prosecutors were also conducting an investigation.
The investigation into Airbus was already conducted in Germany in December 2014. German prosecutors have launched an investigation into Airbus for alleged corruption in multibillion-dollar border security projects in Saudi Arabia and Romania. As The Wall Street Journal informs, German prosecutors raided the German premises of the aircraft maker as part of the probe, but no formal charges were brought against the company.
The very survival of Airbus, with its 134,000 employees and its annual turnover of $78,.6 billion, could be at stake, the German Der Spiegel reports. In June 2017, Airbus CEO Tom Enders said at a meeting with the company’s managers in France: “Leave this company rather than make us take you out of the company. Because we‘re in a deadly serious situation, dear colleagues. ”
Enders himself sees no reason to resign over ongoing corruption investigations, but would be ready to do so if needed, he told Handelsblatt.
“You can be assured: once I am no longer part of the solution, and I hope I would realize myself when that is, I will draw the consequences (and step down). But for now, I don’t think we’re at this point,” Enders told Handelsblatt.
On October 13, 2017, Airbus CEO reiterated that the group could face significant fines as the result of the UK and French probes, Reuters informs.
The charges are just the latest in a string of corruption allegations that could ground Airbus. Austrian defense minister Hans Peter Doskozil has also threatened that the accusations could reach US courts, where billion dollar judgments have hobbled European industrial companies in the past, Handelsblatt informs.
Tom Enders informed that Airbus is conducting its own internal investigation in the hope of being offered a deal by UK prosecutors as a reward for co-operation and sharing results with investigators. Germany’s Economy Ministry also confirmed that the company is “fully cooperating with the authorities.”
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