Airbus faces €300mn suit alleging company misconduct

Airbus (AIB, Toulouse Blagnac) is facing a class action lawsuit from a group of 130 investors who claim to have been duped by misleading publications about the manufacturer’s involvement in and financial settlements involving corruption, bribery, and other forms of fraud.

Lawyers representing the Dutch foundation Stichting Investor Loss Compensation (SILC) filed the lawsuit against Airbus at The Hague District Court on January 3, alleging they suffered damages worth at least EUR300 million euros (USD340 million) as a result of company misconduct.

On its website, the foundation, formed in July 2021, claimed Airbus “materially misrepresented and omitted key facts during the height of its scheme to offer and pay bribes via its employees, executives, and business partners to government officials and airline executives around the world in order to obtain illegal business advantages and win orders on hundreds of aircraft.”

In a statement issued on January 5, SILC elaborated that “the case follows Airbus’ scheme from at least 2008 to 2016 to offer and pay hundreds of millions in bribes” and relates to its “failure to adequately disclose these events in its financial statements over the period from at least February 2014 until January 2020.”

As a result, it said, investors in Airbus purchased shares at an inflated price and suffered “significant damage.” The suit named the accounting firms KMPG and Ernst & Young (EY) as being among the defendants.

As ch-aviation reported at the time, Airbus admitted on January 31, 2020, that it had used a global network of secret agents to bribe officials to win high-value contracts between 2011 and 2015. It agreed to pay penalties worth EUR3.6 billion (USD4 billion).

In the wake of that mega-settlement, SILC and its participants say they are now seeking to hold Airbus SE, members of its audit committee, current and former executives, and its auditors KPMG and Ernst & Young accountable for their actions.

“Airbus was enmeshed in one of the largest bribery and corruption schemes in recent history, as evidenced by the record fines it agreed to pay. Even though Airbus’ top management and its external auditors were aware of this scheme, they failed to disclose the scheme and its consequences in Airbus’ financial statements,” argued Karl Puszkajler, chairman of the foundation’s supervisory board.

Investors had bought or sold Airbus shares unaware that a conviction or a multi-billion dollar settlement was imminent. The amount of EUR300 million comes from a calculation the foundation made based on transactions, inflation, exchange rates, and other factors.

The court will consider the claim against the French company – which formally has its head office in the Dutch city of Leiden and has its registered office in Amsterdam – in April. A second claims foundation, Airbus Investors Recovery Stichting, is also active representing investors against the manufacturer. Also established in Amsterdam last summer, it has not yet filed a claim with a court, the Dutch business daily Het Financieele Dagblad reported.

Airbus declined to comment to ch-aviation on ongoing litigation. But in its third-quarter 2021 financial report, published on October 28, it mentioned under Litigation and Claims a putative class action lawsuit, related to the bribery settlement, that was filed in a US court in New Jersey in August 2020 against Airbus and members of its current and former management.

It also said it had “received notification in August 2021 of two separate claims alleging similar facts as the US class action. The two claims have been filed or threatened in the Netherlands purportedly on behalf of Airbus investors.” Airbus added that the first claim had been filed by a special purpose vehicle incorporated under the laws of Guernsey, while the second related to a demand letter sent by a foundation in the Netherlands.

“The company believes it has solid grounds to defend itself against the allegations. The consequences of such litigation and the outcome of the proceedings cannot be fully assessed at this stage, but any judgement or decision unfavourable to the company could have a material adverse impact on the financial statements, business, and operations of the company,” Airbus said in its report.