February 16, 2017 / 5:56 AM / 6 months ago

Austria to sue Airbus over suspected Eurofighter fraud: APA news agency

The logo of Airbus group is pictured in Colomiers near Toulouse, France, January 11, 2017.Regis Duvignau

VIENNA (Reuters) - Austria's defense ministry is set to file a lawsuit against Airbus (AIR.PA) accusing the planemaker of wilful deception and fraud linked to a 2 billion euro ($2.1 billion) order for Eurofighter jets in 2003, APA news agency said on Thursday.

A recently completed ministry investigation, to be released on Thursday, found that Airbus and the four-nation Eurofighter consortium misled Austria with fraudulent intent about the purchase price, according to APA and ORF radio, which cited a ministry spokesman.

Austria's defense ministry was not immediately available for comment. Austrian and German prosecutors have been investigating the case for years and Munich prosecutors have said they expect to close separate preliminary proceedings by mid-year.

A spokesman for Airbus said the company was unable to comment on the reports as it had just learned about the intended actions through the media. "We don’t know any details. We don’t know which findings this is based on," the spokesman said.

"We can however confirm that in recent years we have supported the activities by the legal authorities, for instance through own investigations," the spokesman added.

Austria initially ordered 18 Eurofighter jets but reduced the order to 15 in 2007. It then ordered a review of the purchase four years ago following bribery allegations.

The deal was controversial from the outset and allegations surfaced almost immediately after its announcement in 2003 that money was pocketed by politicians, civil servants and others via brokers for side deals accompanying the purchase.

A European defense executive, asking not to be identified, said the Austrian ministry's move appeared to be "political" and said Eurofighter had won the deal with the lowest price.

The Eurofighter is built by a consortium comprising Britain's BAE Systems (BAES.L) and Italian group Leonardo (LDOF.MI) as well as Airbus, which represents the other two nations in the European project: Germany and Spain.

While offset deals were part of the agreement to generate additional business for Austrian companies, the costs of those deals should have been reported separately.

Airbus, Europe's largest aerospace group, has said it is co-operating with a separate German probe into the fighter sale to Austria, as well as three probes into suspected irregularities in defense or security markets, including a UK investigation into a $3.3 billion communications deal with Saudi Arabia.

On Wednesday, people familiar with the matter said Airbus was shaking up its international marketing arm amid a separate probe by Britain's Serious Fraud Office into suspected bribery and corruption in the sale of commercial aircraft.

Additional reporting by Tim Hepher in Paris and Shadia Nasralla in Vienna; Editing by Michael Shields and David Holmes

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