U.K. Airbus Corruption Investigators Coordinate With French Probe

By Robert Wall and William Horobin

French and British financial-crimes investigators said they are closely coordinating parallel probes of potential corruption by European plane maker Airbus Group SE.

France's financial crimes investigator, the Parquet National Financier, Friday said it opened a preliminary investigation in July. It is looking into possible problems with several sales contracts the company signed with different carriers, an official at the French financial prosecutor said, adding that the investigation is being carried out "in very close coordination" with the Serious Fraud Office in London.

The SFO, Britain's top corruption watchdog, almost a year ago began examining potential Airbus commercial plane deals overseas and the possible misuse of middlemen to secure contracts. The SFO on Friday said "we continue to work with and assist our overseas law enforcement partners whenever it is appropriate to do so."

Airbus, the world's No. 2 plane maker behind Boeing Co., Thursday disclosed the French probe and said it would "cooperate fully." The company last year said it had alerted the U.K. authorities that it may have submitted flawed information for export credit financing, which spurred the SFO probe.

Airbus also is battling corruption allegations on other fronts.

The British Serious Fraud Office is separately continuing to investigate allegations an Airbus subsidiary paid bribes to win business in Saudi Arabia. The company has said it is cooperating with the probe .

Additionally, the Austrian government last month said it was seeking more than $1 billion in restitution from Airbus over the purchase of Eurofighter Typhoon combat planes in 2003. The country's defense ministry accused Airbus of "fraudulent and deceitful actions" that led to the plane purchase.

Toulouse, France-based Airbus has denied that charge.

After the Saudi Arabian and Austrian cases came to light years ago Airbus launched an internal ethics review in late 2012. The company made changes to the way it does business in response. Those changes helped it discover the latest missteps which it disclosed to authorities, Airbus officials have said.

Corruption charges, if they stick, can be costly. Britain's Rolls-Royce Holdings PLC, a big supplier to Airbus and Boeing Co., in January signed deferred prosecution agreements with U.S., British and Brazilian authorities after pleading guilty to corruption over decades. Rolls-Royce has agreed to pay more than $800 million to settle the cases.

Airbus last month said the probe into potential wrongdoing on sales contracts has already come with a cost. European export credit agencies, which typically act as a financial backstop to overseas sales of Airbus planes and other items, have withdrawn their support. That forced Airbus to provide more customer financing than usual, reducing its free cash flow.

Airbus also has recently restructured its sales and marketing organization involved in overseas deals. Several high-profile executives have departed the company in recent months amid a wider company restructuring.

Write to Robert Wall at robert.wall@wsj.com and William Horobin at William.Horobin@wsj.com

(END) Dow Jones Newswires

March 17, 2017 13:13 ET (17:13 GMT)

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