UK fraud probe casts shadow over Airbus jet sales

Mon Aug 8, 2016 10:36am EDT
 
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By Tim Hepher

PARIS (Reuters) - Airbus Group (AIR.PA: Quote) is bracing for a lengthy period of uncertainty over its core commercial jetliner business after Britain said it would examine suspected irregularities in the use of third-party agents to win contracts.

Europe's largest aerospace company said late on Sunday it had been notified that the UK's Serious Fraud Office had opened a formal criminal probe after being alerted by the country's export credit agency to discrepancies relating to the disclosure of the work of local agents.

The probe raises a sensitive issue for the industry because the agency, UK Export Finance, has for years locked horns with aerospace firms about the need for more transparency, even though it does not object outright to the use of intermediaries.

Airbus Group said the SFO was looking into possible "fraud, bribery and corruption" and that the company continued to co-operate with the investigating agency, having itself tipped off UKEF about internal findings under a recent compliance drive.

"It will take years," a person familiar with the matter said of the SFO investigation, adding it was too early to predict any outcome or consequences.

Airbus Group is already the subject of a four-year-old SFO investigation into a $3.3 billion communications deal with Saudi Arabia, while the SFO is conducting a corruption probe into engine maker Rolls-Royce which it launched in 2013.

The latest case involves discrepancies over the amount of agents' fees disclosed in applications for export support, or missing names of third parties, in some cases dating back years, people familiar with the matter have said.

In April, UKEF halted export funding pending a compliance review and was swiftly followed by France and Germany.   Continued...

 
A flight test engineer holds an Airbus Group flag after the first flight of the Airbus A320neo (New Engine Option) in Colomiers near Toulouse, southwestern France, September 25, 2014.  REUTERS/Regis Duvignau