Insider trading of shares of EADS over Airbus’s problems with the A380 superjumbo was denied by planemaker's CEO Thomas Enders.
In a letter sent late Thursday to Airbus employees, Enders said when he exercised stock options in November 2005, "there was no reason to believe it would be improper." The Associated Press obtained a copy of the letter Friday.
For more than a year, the French Financial Markets Authority, or AMF, has been investigating share sales between November 2005 and March 2006 by 21 top managers of European Aeronautic Defence & Space Co.
A preliminary report by French regulators leaked to the press on Wednesday suggests "massive insider trading" took place at EADS.
Problems with the A380 and the mid-range A350 came to light publicly in June 2006, sending EADS shares tumbling 26 percent in one day.
Enders sold 50,000 shares for a profit of EUR711,750 (US$1.0 million), according to the AMF. Airbus Chief Noel Forgeard in March 2006 made a profit of EUR2.5 million (US$3.2 million).
"To be clear to you all, I have never committed any insider trading, and I have not been accused of insider dealing by anyone, including the AMF," Enders wrote in the letter. "I categorically deny the allegations and insinuations in the press."
Enders called such an accusation "both very serious and unjustified," and said he wrote the AMF to protest the damage caused by the leak of the report. He also said he planned legal action to protect Airbus' reputation.
EADS Chief Executive Louis Gallois, who did not sell shares at the time, also wrote to staff urging them not to be distracted by a "crisis which has nothing to do with the fundamentals of our business."
Thierry Breton, who was French finance minister at the time, appeared Friday at a hastily arranged hearing about the EADS scandal by the French Senate's finance commission.
The daily Le Figaro reported Wednesday that a note was sent to Breton in December 2005 suggesting that the government reduce its 15 percent stake in EADS.
Commission member Philippe Marini was quoted in an interview published Friday in Le Figaro that the French state must have been aware of the risks taken by the Caisse de Depots et Consignations, the government-owned lender known as CDC, when the bank agreed to increase its EADS stake in April 2006 through a bond issue.
"The state had an exemplary behavior, the state never sold one share," Breton told the panel. "I never gave a single recommendation or order to the CDC about the purchase or sale of shares."
While a major shareholder, the French government does not sit on the EADS board. Its interests are represented by the French defense and media conglomerate Lagardere, which holds a 7.5 percent stake.
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