Stay up to date with notifications from The Independent

Notifications can be managed in browser preferences.

Airbus bribery investigation launched by Serious Fraud Office

Probe adds to scrutiny of the role played by cross-border intermediaries, including Monaco-based Unaoil

Julie Johnsson,Mark Deen,Andrea Rothman
Monday 08 August 2016 08:32 BST
Comments
Airbus A350 plane pictured at the Berlin Airshow in June - the company is accused of hiring third party consultants who bribed officials
Airbus A350 plane pictured at the Berlin Airshow in June - the company is accused of hiring third party consultants who bribed officials

Airbus said the UK Serious Fraud Office has opened a criminal investigation into allegations of fraud, bribery and corruption relating to some of its third-party consultants.

The Toulouse-based planemaker said in a statement Sunday that it’s cooperating with investigators probing its civil aviation business.

Airbus had flagged to UK regulators and the European Export Credit Agencies earlier this year “misstatements and omissions” involving the outside contractors in some export financing applications, which it found through an internal probe.

The credit agencies, including UK Export Finance, have suspended some of the backstop financing that Airbus uses to help sell commercial aircraft since the first revelations made four months ago. Airbus said in a 27 July statement that a process for re-establishing export credit “has been agreed and is ongoing.”

Until the financing is restored, Airbus and rival Boeing face the challenge of navigating an uncertain market with limited government assistance. Chicago-based Boeing has been unable to tap trade financing because a congressional impasse has left the US Export-Import bank with too few directors to approve deals.

Jefferies Equity Research estimates that export-credit agencies last year provided 7 per cent of financing for Airbus plane deliveries, compared with 45 per cent from leasing companies and 40 per cent from airlines themselves.

The Airbus investigation adds to the scrutiny of the role played by cross-border intermediaries. Monaco-based Unaoil SAM, which served as a go-between for companies and officials in the Middle East, Africa and former Soviet countries, was searched by authorities earlier this year amid allegations of corruption.

“This will have some negative impact,” said Shukor Yusof, founder of aviation consulting firm Endau Analytics in Malaysia. “Third-party consultants or intermediaries have often caused worries. The business of aircraft sale is so intense and competitive that there are people trying many avenues.”

Airbus said in the 27 July filing that it’s undertaking a sweeping review involving “legal, investigative, and forensic accounting” of consultants and other third parties used to support sales. The company said it’s also using greater due diligence to screen potential contractors.

“The group cannot exclude that the comprehensive review and these enhancements of its controls and practices lead to additional commercial disputes or other consequences in the future,” the filing said.

© Bloomberg

Join our commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in