Airbus CEO Investigated in Eurofighter Corruption Probe

By Robert Wall Features Dow Jones Newswires

Airbus SE Chief Executive Tom Enders is under investigation over alleged corruption in the sale of Eurofighter Typhoon jets more than a decade ago.

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A spokeswoman for Austria's prosecutor said Wednesday that Mr. Enders was being probed, although no charges have yet been brought. She wouldn't discuss details of the case that she said weren't public.

Airbus said the accusations were "completely unsubstantiated" and that it had only found out Wednesday that Mr. Enders was under investigation, which was first reported by Reuters.

The Austrian government filed a criminal complaint in February against Airbus, seeking over $1 billion in restitution for what it claimed was wrongdoing by Airbus in winning an order for Eurofighter Typhoon combat jets signed in 2003. At the time, Mr. Enders ran the defense business of Airbus, then called European Aeronautic Defence & Space Co.

Eurofighter Typhoon combat jets are built by Airbus, in conjunction with BAE Systems PLC and Leonardo SpA.

Airbus says it is cooperating with Austrian authorities.

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The Austrian government said in 2017 it was overcharged for the jets, which it said cost up to EUR1.1 billion ($1.2 billion) in total to buy and EUR183.4 million to operate to date. It first planned to buy 18 of the planes, but reduced the figure to 15 in 2007.

Suspicions of corruption were raised as early as 2002, before the contract was completed, but remained unsubstantiated until 2006, when a parliamentary committee in Vienna identified suspect payments apparently related to the sale. At the time, it had little evidence of the rationale behind the payments and investigations continued. Prosecutors are now under time pressure to act as they approach a 10-year statute of limitation.

The probe is one of several corruption investigations Airbus is battling. The British Serious Fraud Office has been examining alleged bribery by an Airbus subsidiary in business dealings in Saudi Arabia for several years. In 2016, it also began investigating Airbus's possible misuse of middlemen in winning plane deals.

Airbus said in April that the SFO investigation into aircraft financing could lead to penalties with a "material impact."

The company is also facing legal challenges from intermediaries whose contracts it has canceled.

Airbus launched an internal review in 2012 amid concerns over the Austrian deal and the British probe into the actions of its subsidiary in Saudi Arabia. It has now tightened its compliance procedures and taken other steps aimed at preventing future slip-ups.

Write to Robert Wall at robert.wall@wsj.com

(END) Dow Jones Newswires

April 26, 2017 12:21 ET (16:21 GMT)