IE 11 is not supported. For an optimal experience visit our site on another browser.

Top EADS officials probed for insider trading

/ Source: The Associated Press

France's financial markets regulator is questioning leading figures in troubled Airbus parent EADS, including co-Chairman Arnaud Lagardere, as part of a probe into alleged insider trading, French media reported Wednesday.

Arnaud Lagardere is to be questioned May 29, Le Monde reported. Former EADS co-Chairman Manfred Bischoff is to be questioned Thursday. Deputy CEO Jean-Paul Gut was already questioned Tuesday, the report said.

The probe focuses on sales by top executives of millions of euros (dollars) worth of shares in European Aeronautic Defense & Space Co. NV in March and April 2006, weeks before the company announced major delays to the superjumbo A380 that sent the stock price tumbling 26 percent in one day. The share price has still not recovered.

Officials with the regulator, the AMF, and EADS would not immediately comment, nor would Lagardere's media company, Lagardere Groupe SCA.

Lagardere has said that he had no idea about the A380 production problems and that he encouraged the AMF to investigate the stock sales.

Gut, who worked for the Lagardere group before joining EADS, was also questioned on his contacts with Lagardere before the official June 2006 announcement of the A380 production delays. Gut denied transmitting information to Lagardere, Le Monde said.

The report said Gut admitted to being told of the possibility of delays in the A380 program on several occasions by the group's management, but that the A380 delays were said to be "under control" and supposed to have no financial impact.

EADS shares were up 0.5 percent at 23.48 euros ($31.59) Wednesday. Lagardere shares were up 0.5 percent at 61.04 euros ($82.15) in an overall higher Paris market.

The report comes as EADS and Airbus are struggling to rebound after a bruising period of management reshuffles with a restructuring plan that will trim jobs and shut factories around Europe _ and has prompted major union and political opposition in France, where Airbus is based.

Former Airbus CEO Noel Forgeard pocketed 8.5 million euros ($11.5 million) after he was ousted in mid-2006, even though EADS' financial situation had deteriorated alarmingly. Forgeard was among those who sold stock options just weeks before the A380 delays were announced.

Forgeard's so-called golden parachute triggered a debate in France on the use of stock options. It became a major issue in the recent presidential race, with newly elected President Nicolas Sarkozy pledging to outlaw exorbitant severance packages for top corporate executives.

Forgeard's successor, Louis Gallois, told Le Monde Tuesday that the stock option system was "not healthy."